An "outstanding year" to date in its property & casualty operations contributed to investment conglomerate Berkshire Hathaway reporting third quarter net earnings of $2.77bn on Friday (3 November), almost five times the $586mn it made in the hurricane-hit prior-year period.
For the year to 30 September 2006 net earnings were $7.43bn, more than double the $3.40bn earned in the same period last year.
Operating earnings, which exclude investment gains from the company's giant $31bn slush fund of pre-tax unrealised investment gains, were $2.60bn for the quarter and $6.79bn for the nine month period. This compared to $6.79bn and $2.59bn respectively in the prior-year periods.
Its insurance underwriting division contributed almost half of its third quarter operating profit, with $917mn compared to an operating loss of $1.17bn in the three months to 30 September 2005. And for the first nine months of the year, operating profits from the division were $1.62bn, compared to a $475mn loss in the prior-year period.
In a statement, the Warren Buffett-led company conceded the "highly satisfactory" earnings had benefited in a major way from a lack of catastrophe losses in its insurance operations.
"This is due not to managerial brilliance but rather to good luck. Last year, conversely, we got clobbered by a spate of hurricanes, more of which we will surely see in the future," said the company.
It highlighted the strong performance of its GEICO subsidiary, which is "leading the pack with growth far above its peers".
But Berkshire Hathaway warned that the outstanding property casualty performance should be treated with caution.
"The industry's profitability is sure to decline next year - substantially in all probability - and Berkshire's insurers will not be immune from industry trends. We do expect, however, that our insurance results will usually outpace those of the industry and that our long-term advantage could be significant," it concluded.
The company's stock closed at $105,000 on Friday, just below its recent all-time high of $105,600.