updated 11/6/2009 6:37:39 PM ET 2009-11-06T23:37:39

Warren Buffett's company said Friday that its third-quarter profit tripled as the improving economy and stock market boosted the value of Berkshire Hathaway Inc.'s derivative contracts.

Berkshire said it generated $3.2 billion, or $2,087 per share, in net income. That's up significantly from last year's $1.1 billion, or $682 per share.

Most of the swing in earnings is related to an unrealized $1.7 billion gain on Berkshire's derivatives, some of which are tied to credit defaults and some of which are tied to equity markets. That compares to a $1.3 billion loss on Berkshire's derivatives in last year's third quarter.

Excluding the investment and derivative gains, Berkshire's operating earnings were nearly flat at $2.06 billion, or $1,325 per share. Last year, Berkshire reported operating earnings of $2.07 billion, or $1,335 per share.

The four analysts surveyed by Thomson Reuters expected Berkshire to report earnings per share of $1,308.25.

On Tuesday, Berkshire announced its biggest deal ever with a plan to acquire Burlington Northern Santa Fe Corp. for $26.3 billion in cash and stock. Berkshire already owns a 22 percent stake in Burlington Northern and would buy up the rest under the deal, which did not affect the third-quarter results.

Berkshire executives typically do not comment on quarterly earnings reports, and they did not immediately respond to an interview request on Friday.

Berkshire's insurance companies performed well in the quarter, but its other operating companies, which include a number of businesses tied to consumer spending, struggled.

Operating profit in Berkshire's insurance underwriting business, which includes Geico and General Reinsurance, soared to $363 million from $81 million a year ago thanks partly to this year's relatively quiet hurricane season.

Berkshire's insurance units also reported better investment income of $976 million in the quarter, up from $809 million a year ago.

Berkshire's non-insurance companies, which includes Shaw carpet, Acme Brick, Nebraska Furniture Mart and NetJets, generated an operating profit of $774 million in the quarter, down from $1.1 billion a year ago.

NetJets said Thursday that it planned to lay off up to 495 pilots nationwide in January because of reduced demand for its jet service.

Berkshire generated $29.9 billion revenue in the quarter, up from $27.9 billion a year ago.

Berkshire owns more than 60 subsidiaries and it has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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