Kraft Heinz
Buffett’s company said that third-quarter results will include a pretax gain of about $7 billion tied to the merger that formed Kraft Heinz Co. in July. Berkshire owns more than a quarter of the combined company after helping to fund the deal.
The anticipated gain hasn’t reversed Berkshire’s stock slump this year. Class A shares have slipped 4.7 percent since Dec. 31, trailing the 0.9 percent gain in the Standard & Poor’s 500 Index.
Buffett’s favored yardstick -- book value -- rose 1.9 percent to about $149,735 a share during the second quarter. He has said the metric is a good, though understated, proxy for the company’s true worth. Investors often use the figure to gauge whether the stock is attractively priced.
Railroad, Utilities
Berkshire’s biggest non-insurance unit, railroad BNSF, contributed $963 million to quarterly earnings, compared with $916 million a year earlier. Total carloads were relatively flat, and the revenue per car dropped as demand for hauling oil and coal slumped.
Berkshire Hathaway Energy Co., the utility business led by Greg Abel, added $502 million to earnings compared with $375 million a year earlier. The unit benefited from higher profit at its Iowa power business, the addition of a transmission business in Canada and a lower tax rate. Abel has been investing heavily in wind generation, which earns Berkshire credits it can use to offset its tax liabilities.
Trucking, Chemicals
Earnings from manufacturing, service and retailing units increased to $1.31 billion in the second quarter from $1.26 billion in the same period in 2014. The group of businesses includes chemical company Lubrizol; McLane, a trucking operation; and recently acquired units such as a network of car dealerships and a German motorcycle-accessory business.
Berkshire breaks down results for only some businesses in the segment. One of them, the NetJets luxury aviation unit, posted a 17 percent decline in quarterly profit on costs including fees to cancel aircraft purchases.