Bidness Etc - Berkshire Hathaway Misses 4QFY14 Estimated Investments

Berkshire Hathaway, that is owned by successful entrepreneur Warren Buffet, experiences a decline in investments in the fourth quarter of 2014.

Warren Buffett’s Berkshire Hathaway Inc (NYSE:BRK.A) reported a lower-than-expected fourth-quarter 2014 (4QFY14) earnings after the market closed, as the earnings from investment in Burlington Northern Santa Fe (BNFS) grew less-than-expected during the quarter.

Net earnings of the Massachusetts-based company were $4.16 billion ($2,529 per share) for 4QFY14, compared to $4.99 billion ($3,035 per share) in 4QFY13.
On a year-over-year basis, net earnings declined 16.63%. Operating earnings, which excludes investment effects per share, plummeted 10.73% YoY to $2,412 in the quarter from $2,702 in the same period last year. The company fell short of analyst’s estimate for operating earnings per share of $2,702.
Mr. Buffett, who took over Berkshire almost 50 years ago, plans to make this year celebratory. He expanded underperforming textile firm into huge corporate group, which operates in the food, apparel, electric utilities, retailing, real estate and railroads. He adopted a strategy to acquire insurance companies and use their premiums for share acquisition and picks.
Although many business segments benefited from rebounding US economy, BNFS, one of the largest railroads in the world, underperformed last quarter. The shipment delays and poor service to the customers during the quarter affected the earnings.
Net earnings at BNFS climbed 2% YoY to $3.87 billion for FY14. Operating earnings that were recorded by the company in the fourth quarter earnings came around at $2,412 while the analysts at Bloomberg had made the estimations on the earnings to be $2,702. The company saw a fall of 17% in the results that were gathered in the last quarter of 2014, but the company did seem to be discouraged by the news.
Mr. Buffet has spent around five decades in the company and still feels hopeful about facing the fall that the firm is currently facing. He has the experience of building up a company from the scratch as he did it with Berkshire and still feels capable of facing the difficult time that the company is in currently.
In the 4Q report of 2014, the company reported a loss of investment in two of the biggest businesses currently working under Berkshire. The company received total investment of $880 million for the year.
The loss of investment was reported due to the falling value of the dollar in the global market.
On the other hand, profits of the company experienced a rise from $325 million to $358 million on a year to year basis.