Construction fells 18% off Berkshire!

Berkshire Hathaway had recently reported an 18% drop in its profits as a result of the housing woes that is still reverberating the markets. But the CEO Warren Buffett indicated to his shareholders that the company had made more on derivatives thereby hiking the company’s net income by 20%.The revenue generated by Berkshire in 2007 was at $118.2 billion all the way up from the $98.5 billion made last year. Buffett asserted that the company had gained $12.3 billion or an 11% increase in net worth for 2007.

Talking about plans to replace him, Buffett showed no indications of leaving and said that as regards succession his company is well placed to choose his replacements. Berkshire may well have to split Buffett’s job into three parts when they do replace hi8s from the CEO to that of chairman, CIO and CEO. The only job that sort of seems to be finalized is that of the Chairman’s position and that would in all probability go to his son, Howard Buffett.

According to Kilpartick, Buffett is still reluctant to name all of his successors for the moment. Buffett seems to have gotten along by picking up derivative contracts and last year he got about $7.7 billion in premiums alone. But this may well result in the Berkshire earnings quite volatile in the future or so Buffett believes.

Berkshires value as well as those of the other companies it owns had a good year as their value has seen a rapid growth. Berkshire has grown from being listed at $16 a share to $78,008 by 2007. Today, Berkshire owns more than 60 companies from insurance, clothing all the way to natural gas. It also has major investments in coca-cola, Anheuser-Busch Cos as well as some of the other major companies.

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