Warren Buffett's Berkshire Hathaway quarterly profit jumps almost one third

(Reuters) - Warren Buffett’s Berkshire Hathaway Inc on Saturday said fourth-quarter profit rose 32 percent, helped by improved results in its insurance operations and higher gains from investments and derivatives.

Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. REUTERS/Kevin Lamarque

Net income rose to $5.48 billion, or $3,333 per Class A share, from $4.16 billion, or $2,529 per share, a year earlier.

Quarterly operating profit rose 18 percent to $4.67 billion, or $2,843 per share, from $3.96 billion, or $2,412 per share.

Analysts on average had forecast operating profit of $2,814 per share, according to Thomson Reuters I/B/E/S. Revenue rose 7 percent to $51.82 billion.

Book value per share, which reflects assets minus liabilities and which Buffett considers a good yardstick for Berkshire’s intrinsic worth, rose 3 percent from the end of September, to $155,501.

For all of 2015, profit rose 21 percent to $24.08 billion, or $14,656 per share. The gain from the merger that created Kraft Heinz Co prevented profit from edging lower, Berkshire said. Operating profit rose 5 percent to $17.36 billion, or $10,564 per share.

Buffett, 85, has run Omaha, Nebraska-based Berkshire for nearly 51 years. He has transformed it from a failing textile company into a conglomerate with roughly 90 businesses in such areas as insurance, railroads, energy, food, apparel and real estate.

Buffett’s largest-ever acquisition, the $32 billion purchase of industrial parts maker Precision Castparts Corp, closed last month. It ended the year with $71.73 billion of cash.

Berkshire expects on Monday to close its acquisition of Procter & Gamble Co’s Duracell battery business, in exchange for P&G shares that Berkshire now owns.

Quarterly profit from insurance operations rose 25 percent to $1.34 billion, as improvement in reinsurance offset higher claims payouts in the Geico auto insurance unit.

Berkshire said gains from investments and derivatives quadrupled to $805 million. This in part reflected profits on stock sales and gains on long-term options contracts whose value is tied to the performance of the stock market.

Profit at the BNSF railroad unit fell 9 percent to $1.08 billion, reflecting lower demand, especially in coal and some industrial products, as oil prices fell.

Buffett said BNSF’s profit could decline further in 2016.

Berkshire’s insurance units ended 2015 with $87.7 billion of float, the amount of premiums held before claims are paid, Buffett said. Berkshire uses float to help fund acquisitions and other investments.

The company has well over $100 billion of equity investments.

Berkshire said it plans to keep its big stake in IBM Corp despite a $2.6 billion paper loss as of Dec. 31.

In Friday trading, Berkshire’s Class A shares closed at $198,190.50, and its Class B shares closed at $131.92. Both are nearly unchanged this year.

Reporting by Jonathan Stempel in New York; Editing by Nick Zieminski and Leslie Adler