Berkshire Hathaway (NYSE:BRK) Profitable in First Quarter

Berkshire Hathaway (NYSE:BRK) recorded a solid first quarter with profits of $3.63 billion, in contrast to last year's net loss of $1.5 billion during the same quarter.

Operating earnings increased from $1.7 billion last year to $2.2 billion this year, a 30 percent gain.

The company was led by gains in investments and derivatives where they scored a $1.4 billion rise this year, a huge improvement over the $3.2 billion in losses incurred last year in those segments.

CEO Warren Buffett added that the economy improved some in March and April, adding to the performance for the quarter.

The addition of Burlington Northern Santa Fe to the Berkshire fold has already started paying benefits, which Buffett said at the shareholders meeting that “we are seeing an uptick” in those industries like railroads which serve broader markets.

This was also a move by Buffett to diversify the holdings of Berkshire which had been so dependent on insurance and mortgage-related businesses in the past. Insurance will of course continue to be the underpinning of Berkshire, but it is a good sign to see the additional strength Burlington will give them.

Other areas of the company doing well, included the utility and energy units of the company, which also include their railroad properties, which generated $555 million in profits and the manufacturing, service and retail businesses surged by 85 percent to $477 million. 

Buffett is looking for the residential real estate market to turnaround sometime in 2011.