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Insurance, economy, tariffs weigh on Berkshire Hathaway

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Berkshire Hathaway on Saturday said its quarterly operating profit fell more than analysts expected, as weakness in insurance underwriting, a slowing economy and trade woes weighed on the conglomerate run by billionaire Warren Buffett.

Berkshire's auto insurer Geico suffered a larger number of accident claims, while competition from foreign producers, lower imports and "trade policy" dampened cargo volumes for consumer and agricultural products at its BNSF railroad.

Earnings also barely budged at Berkshire's manufacturing businesses, where US tariffs hurt sales of gas turbine and pipe products at its Precision Castparts unit, and its service and retailing businesses.

Second-quarter operating profit declined 11 per cent to US$6.14 billion (S$8.45 billion), or roughly US$3,757 per Class A share, from US$6.89 billion, or roughly US$4,190 per Class A share, a year earlier.

Analysts on average expected operating profit of US$3,851.28 per share, according to Refinitiv IBES.

Berkshire also said quarterly net income rose 17 per cent to US$14.07 billion, or US$8,608 per Class A share, from US$12.01 billion, or US$7,301 per Class A share, a year earlier, reflecting higher unrealised gains on Berkshire's investments.

The US economy's annualised growth rate slowed to 2.1 per cent in the second quarter from 3.1 per cent in the first quarter, as an acceleration in consumer spending was partially offset by declining exports, manufacturing and business investment, reflecting the trade war between the US and China.