Warren Buffett's Berkshire Hathaway Expected to Report Lower Earnings Friday

Warren Buffett's Berkshire Hathaway is expected to report a decline in quarterly operating earnings for the third quarter, its fifth consecutive year-over-year quarterly drop.

Berkshire's results will be released after tomorrow's (Friday) stock market close.

Thomson One Analytics has forecasts for Berkshire's earnings per share from just two analysts covering the stock: $1425 and $1433.38.

That puts the "consensus" estimate at $1429.19, which would be a 13.6 percent drop from last year's third quarter and a 2.4 percent decline from the second quarter of this year.

Berkshire's insurance companies are responsible for a large portion of the company's operating profits, and they've been suffering this year along with the rest of the industry.

We'll also be looking to see how hard Berkshire's net income is hit by "unrealized" mark-to-market losses suffered by the long-term derivatives contracts held by the company. Buffett has said he's the positions will eventually be very profitable, but they're under pressure right now due to the continuing turmoil in global financial markets. Those paper losses fell from $1.6 billion at the end of the first quarter to $962 million for the first half of the year.

Another item to look for: Berkshire's unrealized gains from marketable securities, like stocks. Those "paper" profits are not included in the overall earnings number, but are part of the quarterly report. During the first six months of the year, they fell 33.6 percent to $21.1 billion.

Next Friday (November 14), Berkshire is expected to file its third quarter stock portfolio 'snapshot' with the SEC.

Three months ago, that report revealed a new stake in NRG Energy and a few other additions to existing holdings.

It will be very interesting to see if Buffett has been taking advantage of the market's continued declines to buy U.S. stocks for his Berkshire portfolio as enthusiastically as he has been for his personal account.

Current Berkshire stock prices:

Class A:

Class B:

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