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Executive Producer
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Warren Buffett started the second half of today's question-and-answer session with Berkshire Hathaway shareholders by giving them a preview of next Friday's earnings report for the first quarter.
Buffett says operating earnings will be about $1.7 billion, after taxes. That compares to around $1.9 billion last year, and works out to a decline of almost 11 percent.
He partially attributes the drop to losses in Berkshire's investing portfolio and to losses on credit default swaps.
Book value fell about six percent during the period.
Berkshire's float has increased by about $2 billion due to a Swiss Re transaction.
Utility earnings are "reported down" a bit, partially due to a prior benefit from Berkshire's now discarded deal with Constellation Energy Group. Buffett says he was disappointed that deal didn't work out.
He expects Berkshire's utility and insurance businesses will do "quite well" unless there is some "huge natural catastrophe."
Aside from insurance and utilities, all of Berkshire's other businesses "are basically down."
Buffett reports that Berkshire ended the first quarter with about $22.7 billion in cash, but it spent $3 billion the very next day on its Dow Chemical transaction.
Buffett notes that Berkshire's credit default swaps have gotten worse since he wrote his annual letter to shareholders earlier this year. Earlier today, he said he expects losses from some of those contracts.
Current Berkshire stock prices:
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Class A: [US;BRK.A
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Class B: [US;BRK.B
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Data is a real-time snapshot *Data is delayed at least 15 minutes