Omaha, Nebraska-based Berkshire Hathaway has reported a 13% rise in second quarter profits, offsetting losses caused in part by billionaire owner Warren Buffett's misreading the movement of the US dollar in comparison to other currencies.
The insurance carrier posted a net income of $1.45 billion, up from $1.28 billion in the same period last year, despite seeing a 13% decline in insurance underwriting revenues.
Berkshire cited a fall in insurance losses from $3.7 billion to $3.47 billion as one of the reasons for the increase in profits, as well as positive earnings from its non-insurance business, which reached $576 million from $508 million last year.
The firm said its investment income from its insurance units, which include Geico and General Re, saw a 22% rise to $585 million from $479 million in 2004.
However, Berkshire also suffered a $619 million pretax loss on foreign currency holdings. Mr Buffett had been betting against the dollar based on fears that the US trade deficit will erode its value, but the dollar strengthened 6%, which resulted in a second consecutive loss on foreign exchange investments for Berkshire.
Berkshire has recently been at the center of a probe launched by the Securities and Exchange Commission looking into whether the company used finite reinsurance to boost its financial results.