February 25, 2012 / 2:37 PM / 6 years ago

Berkshire Hathaway fourth-quarter profit declines

(Reuters) - Berkshire Hathaway’s fourth-quarter profit fell sharply, in part on an underwriting loss in its reinsurance business related to life insurance, the company said on Saturday.

Berkshire Hathaway Chairman Warren Buffett wanders the company trade show before his company's annual meeting in Omaha, Nebraska April 30, 2011. REUTERS/Rick Wilking

Berkshire said it earned $3.05 billion, or $1,846 per Class A share, compared with earnings of $4.38 billion, or $2,656 per share a year earlier.

Revenue rose slightly, though, to $37.96 billion from $36.17 billion in the fourth quarter of 2010.

Berkshire said its reinsurance unit reported a pre-tax underwriting loss of $581 million in the quarter on a life insurance contract, where mortality rates have exceeded assumptions.

The company also reported a sharp decline in investment and derivative gains in the quarter, falling roughly $1 billion from a year earlier.

The conglomerate ended the year with $37.3 billion in cash and equivalents, down about $1 billion from a year earlier.

Book value at year-end was $99,860. Berkshire’s share buyback program is capped at 110 percent of book value, well below the stock’s close of $119,000 on Friday.

Chief Executive Warren Buffett released his annual letter to shareholders on Saturday.

Reporting By Ben Berkowitz; Editing by Doina Chiacu

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