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Berkshire Hathaway profit falls on Japan

Warren Buffett's conglomerate Berkshire Hathaway Inc reported a smaller profit for the first quarter, as reinsurance losses from the March 11 earthquake in Japan dragged down results.

May 07, 2011 / 03:26 PM IST

Warren Buffett's conglomerate Berkshire Hathaway Inc reported a smaller profit for the first quarter, as reinsurance losses from the March 11 earthquake in Japan dragged down results.


Buffett preannounced the figures at last Saturday's annual meeting of Berkshire, the ice-cream-to-insurance giant the world's third-richest man controls.


Berkshire reported a net profit of USD 1.51 billion, or USD 917 per Class A share, compared with a profit of USD 3.63 billion, or USD 2,272 per Class A share, a year earlier.


The company took a provision of USD 1.7 billion in the first quarter for catastrophe losses, primarily for the Japan earthquake but also from a quake in New Zealand and flooding in Australia. Buffett last weekend said the first quarter was the second worst in the industry's history.


Berkshire also recorded losses of USD 506 million in the first quarter for stocks where the company's investment was in a loss position and that loss was not considered temporary. The biggest share of the loss was an impairment on part of Berkshire's stake in Wells Fargo.


Berkshire came under pressure from securities regulators last year over the way it accounted for losses on stocks in its portfolio, with the SEC pushing the company to recognize such losses more quickly.

The conglomerate reported USD 41.18 billion in cash and cash equivalents at the end of the quarter.

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