Examining Berkshire’s Q3 Results With Special Focus on NetJets

Berkshire Hathaway posted significantly higher operating profits for the third quarter of 2010 mainly due to the contribution of Burlington Northern Santa Fe, which was acquired in February, along with improved results in the company’s diverse collection of economically sensitive businesses which have seen improved conditions this year. However, while operating earnings increased 35.6 percent from the prior year period to $2.8 billion, net earnings declined to $3 billion for the quarter which represents a 7.7 percent drop from the prior year period. The decline in net earnings was due to a small loss in Berkshire’s overall derivatives portfolio compared to a large gain in the third quarter of 2009. Berkshire’s book value per share increased to $90,823 representing a 4.8 percent increase for the quarter. Read this article for more details and analysis.

Sokol May Increase Stake in Middleburg Financial

While Todd Combs has been at the center of a frenzy of speculation regarding Berkshire Hathaway’s succession planning this week, longtime Berkshire shareholders understand that the choice of a future Chief Executive Officer is a far more important question. The investment managers at Berkshire will all report to the future CEO who will have ultimate accountability for all capital allocation decisions. Read this article for our continuing coverage of David Sokol’s investment in Middleburg Financial.

NetJets Plans to Expand Fleet Amid Continued Weakness in Business Aviation

NetJets has announced a significant purchase agreement with Embraer that will add up to 125 Platinum Edition Phenom 300s to the NetJets fleet. According to a press release issued this afternoon, the agreement with Embraer is the first step in the execution of a ten year fleet plan intended to satisfy the demands of NetJets customers. The company indicates that today’s announcement is the first of several to come in the next few years and that future plans will include midsize and larger fleets in addition to orders already on the books to acquire $2.95 billion worth of aircraft. Read this article for more details.

Buffett Affirms Continued Support for BYD

As we suspected last week, reports that Berkshire Hathaway is planning to sell its 10 percent stake in BYD have proven unfounded. Warren Buffett, Charlie Munger, and David Sokol are in China this week and reaffirmed Berkshire’s support for BYD. CNBC’s Becky Quick is traveling with the Berkshire executives and reported on the events taking place today. View this article to see the video report.

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