Lower Insurance Rates May Result in a Fourth-Quarter Drop for Berkshsire Hathaway
Buffett's Berkshire Hathaway Inc. may report lower fourth-quarter profit later today because of falling insurance rates. The company has been scaling back coverage of coastal property as prices drop from their highs following Hurricane Katrina in 2005.
Earnings probably declined 10 percent to $1,667 a share, excluding one-time gains such as the sale of shares of PetroChina Co., said Charles Hamilton, an analyst at FTN Midwest Securities Corp. in Nashville, Tennessee. Berkshire typically gets about half its profit from insurance.
"We're going into a much more volatile period for insurance earnings,'' Hamilton said in an interview. The fourth quarter of 2006 "was extraordinarily good with low catastrophe losses. We're getting back more to normal historical levels.'' Hamilton rates the shares "neutral.''
Published on February 29, 2008
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