Berkshire Hathaway Operating Earnings Rise 42%

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Omaha, Nebraska (TheStreet) -- Berkshire Hathaway late on Friday reported a very solid first quarter, as the Warren Buffett-run conglomerte continued to hit new record highs amid a stock market recovery that's lifted the value of its investments spread across stocks, energy, transportation and housing, among others.

Berkshire reported first-quarter operating earnings of $3.782 billion, or $2,302 per Class A share, increasing from $2.665 billion, or $1,615 billion per Class A share, during the first quarter of 2012.

Factoring in $$326 million in gains on investments and $784 million in gains on derivatives, first-quarter net earnings to Berkshire Hathaway shareholders came in at $4.892 billion, or $2,977 per Class A share, increasing from $3.345 billion, or $1.966 a share, a year earlier. During the first quarter of 2012, the bottom-line results included $70 million in investment losses and $650 million in gains on derivatives.

First-quarter revenue totaled $43.867 billion, increasing from $38.147 billion in the first quarter of 2012.

The consensus among analysts polled by Thomson Reuters was for Berkshire Hathaway to report a first-quarter profit to shareholders of $3.743 billion on revenue of $42.213 billion.

In its Insurance and Other segment, Berkshire saw earned insurance premiums increase 16% year-over-year to $9.377 billion, while sales and services revenue also grew 16%, to $22.418 billion.

Shares of Berkshire Hathaway have returned 21% this year, hitting a new all-time high on Friday, closing at $108.64.

Berkshire Hathaway's earnings come just ahead of the firm's May 4 annual shareholder meeting.

For its combined insurance units, Berkshire reported a pre-tax underwriting profit of $974 million, improving from an underwriting loss of $191 million a year earlier.

Berkshire's underwriting profit improvement came on the heels of similar improvement for American International Group , which late on Thursday reported its first underwriting profit since the second quarter of 2009.

The company's Railroad, Utilities and Energy segment, which includes MidAmerican Energy and BNSF Railways, saw 6% year-over-year revenue growth, to $8.4 billion in the first quarter.

Shareholders are investing in Berkshire's ownership of operating businesses and the leverage that the company should get from the next five-to-10 years of economic improvement, according to William Smead, chief investment officer of Smead Capital, an investor in Berkshire's B-shares.

"I expect Mr. Buffett and Mr. Munger to share how undervalued they still think their stock is... I would love to get reinforced on that," Smead said, of his expectations heading into the firm's annual meeting Saturday.

As Buffett welcomes investors to the shareholder meeting, the "Oracle of Omaha" isn't likely to rest on his laurels.

In Berkshire's 2012 annual shareholder letter, Buffett lamented the underperformance of the firm's book value growth relative to the S&P 500, and even outlined a path towards a dividend.

TheStreet will be live-blogging Berkshire's shareholders' meeting, starting at 8AM ET on Saturday: