Warren Buffett's Berkshire Hathaway has reported a 77 percent drop in third-quarter earnings, hurt by declining insurance profits and a $1.05 billion investment loss.
Net income fell to $1.06 billion, or $682 per Class A share, in the quarter ending Sept. 30. That's down sharply from year-ago profit of $4.55 billion, or $2,942 per share, which included a $2 billion gain aided by the sale of PetroChina stock.
Omaha, Neb.-based Berkshire Hathaway Inc. says operating profit in its insurance underwriting business plunged to $81 million from $486 million a year ago.
Year to date, Berkshire's net worth slipped to $120.15 billion from $120.73 billion, but during October, price declines in investments and increased liability for equity index put option contracts accounted for a $9 billion decline in net worth. Associated Press
AT&T Inc., battling Verizon Wireless to create the biggest U.S. wireless service, agreed to buy Centennial Communications Corp. for $944 million to add mobile-phone subscribers.
The cash transaction will add 1.1 million wireless customers and enhance AT&T's coverage in the Midwest, Southeast and Puerto Rico, Dallas-based AT&T said Friday. The company said the purchase should close in the second quarter of 2009.
AT&T and Verizon are expanding through acquisitions as subscriber growth slows – more than four-fifths of the U.S. population already has a mobile phone. When Verizon completes its purchase of Alltel Corp., it will leapfrog AT&T as the biggest U.S. carrier. Bloomberg News
Consumers boosted their borrowing in September, defying expectations for a cutback.
The Federal Reserve's report, released Friday, says consumer credit increased at a 3.2 percent annual pace in September. That was up from a 2.9 percent rate of decline in August and marked the biggest increase since July. Economists expected consumers trimmed their borrowing at a 0.5 percent pace in September.
Consumer debt rose by $6.9 billion in September from the previous month to a total of $2.59 trillion.
The Fed's measure of consumer borrowing does not include any debt secured by real estate, such as mortgage or home equity loans. Associated Press
Pending U.S. home sales fell more than expected in September, after posting a big jump in the previous month.
The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell 4.6 percent Friday to a reading of 89.2. That's down from an upwardly revised August reading of 93.5.
Economists surveyed by Thomson Reuters expected a September reading of 90.6.
The index was 1.6 percent above year-ago levels. It sunk to a record low of 83 in March, and stood at 87.8 in September 2007.
The reading should provide a preview of October's existing home sales numbers when the Realtors group releases them on Nov. 24. Clearly, one negative influence on buyer psychology will be last month's Wall Street nosedive. Associated Press
E.W. Scripps Co., publisher of the Rocky Mountain News, is cutting 400 jobs, or about 10 percent of its staff, and suspending dividend payments as newspaper industry advertising sales continue to decline.
The job cuts at the company's publications will result in annual savings of about $15 million, Cincinnati-based Scripps said Friday. The newspapers will employ fewer than 4,000 by year-end. Scripps also said it suspended the quarterly dividend of 15 cents a share to improve financial flexibility.
Newspaper publishers have been trying to trim costs at a time when the decline in print ad sales has steepened and online ads aren't making up the difference. U.S. newspaper circulation fell 4.6 percent in the past year, and the price of newsprint has risen at a record pace.
“These are unusual times, not without difficulty and peril,” Chief Executive Officer Rich Boehne said in the statement. Bloomberg News