Buffett's Berkshire Hathaway Reports Drop in Net Earnings

Warren Buffett's Berkshire Hathaway Inc. said its first-quarter net earnings fell 27%, hurt by weaker investment gains.

Berkshire's results were released Friday ahead of the company's widely attended annual meeting Saturday in Omaha, Neb.

Berkshire reported first-quarter net earnings of $4.06 billion, or $2,469 per Class A share equivalent, from $5.59 billion, or $3,401 a share, in the year-earlier period. Operating earnings, which exclude some investment results, fell to $3.56 billion, or $2,163 a Class A share, from $3.74 billion, or $2,274 a Class A share, in the year prior.

Investment gains totaled $205 million in the first quarter, down from $2.38 billion a year ago.

The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers, retailers and even auto dealerships. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico insurance and See's Candies.

Berkshire also holds large investments, especially in the stock market. The company more than doubled its stake in Apple Inc. in the first quarter, making it one of the company's biggest equity holdings.

For the U.S. property and casualty insurance industry, catastrophe losses in the first quarter are expected to be the highest for this time of year on record because of tornadoes and large storms.

Notably, the company's insurance-underwriting operations posted a loss of $267 million in the quarter, compared with a profit of $213 million profit.

A drop in coal volumes in 2016 lowered profits at Berkshire's BNSF Railway, weighing on Berkshire's year-ago results.

Book value, Mr. Buffett's preferred yardstick for measuring net worth, rose 3.5% to $178,073 per Class A equivalent share as of March 31. Last year, Berkshire reported a 1.2% increase in book value for the first three months of the year.

Class A shares closed Friday at $250,000 exactly, up 16% over the past year.

In addition, the 86-year-old Mr. Buffett, whose shrewd investments have earned him the nickname "the Oracle of Omaha," still has plenty of cash on hand for future acquisitions as a way to drive profit. Berkshire held $96.5 billion in cash at the end of the first quarter, up from $86 billion at year-end.

Berkshire and Brazilian private-equity firm 3G Capital made a $143 billion approach to take over Unilever PLC in February, but Unilever declined, raising questions among shareholders and analysts about what Berkshire's next deal will be.

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

05-05-17 1912ET