'sfirst-quarter operating profits slipped year over year on lower earnings fromits insurance and railroad businesses.
Theconglomerate reported after-tax operating earnings of $3.74 billion in thequarter, down from the $4.24 billion that it recorded in the first quarter of2015, according to preliminary results posted during Berkshire Hathaway'sannual shareholders meeting.
After-taxnet earnings totaled $5.59 billion, versus $5.16 billion in the year-earlierquarter. The company's net earnings for the first quarter were boosted in partby $1.85 billion of investment and derivative gains, compared with $920 millionof investment and derivative gains in the same period a year earlier.
Berkshirereceived $213 million of after-tax operating earnings from its insuranceunderwriting, compared with $480 million in the 2015 first quarter. Losses fromthe claims tied to hailstorms in Texas and other catastrophe events pressuredthe company's insurance operations overall, Chairman, President and CEO WarrenBuffett said, even as some of its individual businesses performed well.
"Thebasic underwriting at GEICO [Corp.]is actually improving, but we had some important hailstorms in Texas toward theend of the quarter," Buffett said. "There were more cat losses in thefirst quarter than last year."
After-taxinsurance investment income was $919 million, up from $875 million in the firstquarter of 2015.
Berkshire'searnings also suffered from a drop in profits from its railroad segment, headded, in line with a tougher environment for railroad companies throughout thesector.
"Allthe major railroads were down significantly in the first quarter and almostcertainly will continue to be down the balance of the year," Buffett said.
After-taxearnings from Berkshire's railroad, utilities and energy units were $1.23billion, down from $1.47 billion in the prior-year period.