UPDATE 1-Buffett's Berkshire boosts operating profit as economy improves

Berkshire Hathaway Inc, the conglomerate run by billionaire Warren Buffett, on Saturday said its quarterly operating profit rose 14%, as it improved results in multiple business lines and generated more investment income from its insurance businesses.

Third-quarter operating income increased to $7.86 billion, from $6.88 billion a year earlier. Berkshire boosted profit as the U.S. economy slowed less than expected in the quarter. Resilience in consumer spending offset a contraction in business investment.

Net income fell 11% to $16.52 billion, or $10,119 per Class A share, from $18.54 billion, or $11,280 per share, reflecting lower realized and unrealized gains from Berkshire's investments. A U.S. accounting rule requires earnings to include the unrealized gains even if Berkshire has no plans to sell. Buffett said the resulting volatility can mislead investors.

Berkshire's shares have lagged the broader market, in part because of Buffett's inability to deploy his company's large pile of cash. Class A shares of Berkshire closed Friday at $323,400, up 5.7% in 2019, lagging the 22.3% gain in the Standard & Poor's 500. Class B shares closed at $215.83, also up 5.7%.

The Omaha, Nebraska-based conglomerate operates more than 90 businesses that also include Dairy Queen ice cream, Fruit of the Loom underwear, and its namesake energy company and real estate brokerage.

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