Berkshire Loses $1.53 Billion

Berkshire lost 1.53 billion in the first quarter of 2009 compared to earnings of 940 million in the first quarter of 2008.

Is something lost, however, if you know right where it is?

That may be the question some are asking about the earnings--which were hurt by large write-offs of investments that many expect to work out well over time. (This is particularly the case with Buffett's big derivative bet on the markets.)

As the 10Q shows, the operating businesses struggled but both the utility and insurance operations put in a solid performance. Berkshire continues to show underwriting gains in its insurance business(es) and is using the (more valuable) float from them wisely.

Josh Funk, of the Associated Press, noted:

Berkshire officials say the company's operating earnings are a better measure of how the company is performing in any given period because those figures exclude derivatives and investment gains or losses. Berkshire reported $1.71 billion in operating earnings in this year's first quarter, which was down nearly 12 percent from $1.93 billion in operating earnings a year earlier.

This is an important point when trying to evaluate Berkshire today. The company's operating businesses are struggling, but still bringing in a lot of cash, and Buffett is able to invest that at what are most likely very low asset prices.

While those low prices have led to large write-downs, they also provide a big opportunity for Berkshire.