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Berkshire operating profit up
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November 12, 1998: 7:20 p.m. ET
Better-than-expected results at Geico insurance unit softens net income decline
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NEW YORK (CNNfn) - Berkshire Hathaway Inc. reported a decline in earnings Thursday, but said its operating profit grew in third quarter.
The company's after-tax earnings from operations grew to $264 million, or $212 per share, from $248 million, or $201 per share, for the same period last year. For the first nine months, Berkshire's earnings from operations totaled $828 million, or $667 per share, above last year's $766 million, or $621 per share.
For the quarter ended Sept. 30, the company's net income after taxes totaled $365 million, or $293 per share, below last year's $367 million, or $297 per share. Year-to-date, Berkshire earned $2.26 billion, or $1,822 per share, compared to $929 million, or $754 per share, one year ago.
The third-quarter decline in net income, and the nine-month surge, reflected the sale of Berkshire investments in the marketplace. The company, however, emphasized that the widely varying numbers had a very minor impact on shareholders' equity, because Berkshire records its investments at market value, and most of the realized gains already had been priced into the balance sheet.
Geico, Berkshire's insurance unit and its largest operation, helped boost the company's operating income with an underwriting profit margin of 10 percent for the third quarter and 9 percent for the first nine months.
These results exceeded company goals, but Berkshire said premium rate reductions in several states should put future margins more in line with targets.
Additionally, auto insurance in all categories -- preferred, standard and nonstandard -- increased, with voluntary policies in force expected to grow to 20 percent for the full year, the company said. Berkshire plans a major expansion of Geico's physical facilities to support future growth.
Shares of Berkshire (BRK.A) fell 150 to 66,700. 
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Berkshire Hathaway
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