Berkshire Hathaway's 3Q Retail Revenue +5%

Warren Buffet Punts Borsheims in Investor Message

Nov 9, 2014 4:37 AM By Avi Krawitz

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RAPAPORT... Berkshire Hathaway reported that revenue from its retail division increased by $48 million, or 5 percent year on year, in the third quarter that ended on September 30, 2014. The division, which includes Ben Bridge Jeweler, Borsheims Fine Jewelry and Helzberg Diamonds, as well as home furnishings businesses and See’s Candies among others, had pre-tax earnings that was unchanged compared with a year earlier.

Warren Buffett, Berkshire Hathaway’s CEO, gave a promotional note about Borsheims, in his quarterly message to investors, singling out the jeweler along with insurance company GEICO as “two ways that can save you real money.”

“I've looked at the figures for all publicly-owned jewelry companies and the contrast with Borsheim's is startling,” Buffett wrote. “Our one store operation, with its huge volume, enables us to operate with costs that are fully 15 to 20 percentage points below those incurred by our competitors."

He noted opportunities for long distance purchases from the store through its catalog mailing, adding that the company does “a huge amount of business in this low-key way.”

Whether it was a ploy to lift the retail business following a mediocre third quarter given the decline in earnings far this year is anyone’s guess.

During the first nine months of the year, revenue at the retail operations grew $100 million, or 3 percent, however pre-tax earnings declined $12 million, or 6 percent, compared to a year earlier. Berkshire did not disclose full sales and earnings data for its separate divisions.

Berkshire’s group revenue overall rose 10 percent year on year to $51.2 billion during the third quarter, while net earnings fell 8 percent $4.72 billion. Revenue during the first nine months of the year grew 8 percent to $146.41 billion, as net earnings increased 8 percent to $15.95 billion.

Tags: Avi Krawitz, Berkshire Hathaway, borsheims, diamonds, Jewelry, Rapaport, warren buffett