SOME of Berkshire Hathaway’s largest units will post record profits this year, but the conglomerate's housing-related businesses are doing as poorly as they ever have, chief executive Warren Buffett said yesterday.
Speaking at a Fortune event, Buffett said Berkshire’s Burlington Northern rail unit, its MidAmerican energy unit, manufacturer Iscar and diversified group Marmon will all post record profits this year.
On the other hand, Buffett said Berkshire’s Shaw Carpet unit is down about 25 per cent of its staff, while the Acme Brick business has idled half its factories.
“As of today our housing-related businesses are as bad as they’ve ever been during this period,” Buffett said.
The one large business Buffett did not mention was Berkshire’s insurance business, which ranges from auto insurer Geico to reinsurer National Indemnity. He has previously said Berkshire’s insurance arm might post an underwriting loss for the year.
Buffett also brushed off concerns over the sharp drop in Bank of America shares,
The Sage of Omaha made a $5bn investment in the bank last month with warrants to buy more at $7.14 per share, but the bank has slumped below $6 recently.
“We agreed to hold it for at least five years, so what I’m thinking about is where Bank of America will be in five years; and nothing in the last 24 hours or 48 hours has changed my views on that.”
City A.M. Reporter