Berkshire Hathaway's first quarter results and annual reports arrive at the same time so the next post links to the annual report.

Berkshire's First-Quarter Profit Tumbled 64%, (Wall Street Journal, subscription req'd) as underwriting income wilted and the giant conglomerate reported $1.7 billion in unrealized derivatives losses. 

Last quarter, Warren Buffett told investors that "the party is over," saying he expects insurance earnings to fall off significantly in 2008. Though Berkshire owns businesses ranging from See's Candies to Benjamin Moore paint, its various insurance companies still generate the bulk of Berkshire's results.

Mr. Buffett's conglomerate said revenue fell 21% to $22.3 billion.

Excluding investments derivatives, which Berkshire called "usually meaningless," the company reported per-share earnings of $1,247.

From Reuters:

"When people see these derivatives numbers, they may be concerned, but Buffett gets his cash up front, so I'm not concerned about balance sheet integrity," said Thomas Russo, a partner at Gardner, Russo & Gardner, which invests more than $3 billion. "I'm not surprised at the insurance decline. Berkshire has a culture in which it will stop writing business it doesn't want."  [My bold emphasis.]

Also from this article in Bloomberg.com:

May 2 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett, who has used dozens of acquisitions to beat every major U.S. stock index, is poised to extend his lead with more than $40 billion to spend as the credit crunch sidetracks other bidders.

With the U.S. on the brink of recession, investors expect Buffett to deploy Berkshire's cash to scoop up bargains. Berkshire rose 22 percent in New York trading in the past 12 months as the worst housing slump in a quarter century slowed the economy, led to record losses for banks and securities firms and caused the Standard & Poor's 500 Index to decline 6.8 percent.

Near the end is this MONEY quote:


A Word version of this article may also be found at my website here under the date May 5.