NEW YORK (CNNfn) - Solid investment gains and a stronger-than-expected profit margin for its GEICO automobile insurance operations helped boost Berkshire Hathaway's 1998 net income by 49 percent, the company said Tuesday.
Net income for the company, known for its investment activities under the aegis of Chairman Warren Buffett, rose to $2.83 billion, or $2,262 a share, from $1.90 billion, or $1,542, in 1997.
Most of the increase came in realized investment gains, which more than doubled to $1.55 billion, or $1,021 a share, from $704 million, or $971.
The Omaha-based company said GEICO's underwriting profit margin rose 6.7 percent, well above target. But it said the situation isn't likely to continue. Rate reductions in certain states are likely to reduce profit margins in 1999.
GEICO was Berkshire Hathaway's largest operation until the acquisition of General Re, the reinsurer that was acquired in late December.
Class A shares of closely held Berkshire Hathaway (BRK.A) were down 405 to 73,000 in Tuesday mid-morning trading. Class B shares (BRK.B) were down 21 to 2,416.