Insurance turnaround helps double profit at Berkshire Hathaway

Warren Buffet’s conglomerate Berkshire Hathaway reported a sharp rise in profit this afternoon, as tax cuts and stronger insurance results boosted earnings.

Operating profit in the third quarter of the year climbed to $6.88bn (£5.3bn), marking a steep rise from $3.44bn in the previous year and higher than the Wall Street estimates of $6.11bn.

The firm also repurchased just under $1bn of stock, suggesting Buffet sees a shortage of appealing investment options.

Meanwhile, insurance underwriting income was $441m in the third quarter, compared with a $1.4bn loss in the same three months the year before.

“This is absolutely one of the biggest quarterly earnings reports that has ever come out of a United States corporation,” said Bill Smead, chief executive of Smead Capital Management in Seattle, a Berkshire shareholder.

Helping the company’s massive insurance operations were lower estimated liabilities from insurance last year, when major losses rocked the industry, including three US hurricanes and an earthquake in Mexico.