Buffett's Berkshire Earns $3.1 Billion, War Chest at $40 Billion

Quarterly results from Berkshire are not a stock-moving event. The typical profile of the Berkshire investor is that of a long-term holder -- if not acolyte of Buffett -- who discourages any focus on short-term financial performance. Berkshire's results are a good proxy, though, for the state of the U.S. economy, as Buffett's conglomerate spans the financial, railroad, energy, housing, consumer goods and food and beverage sectors, among others.

Berkshire's manufacturing, retail and services business saw across the board increases in revenue versus the prior year, though its grocery distribution business, McLane, experienced an earnings decline, due to manufacturer price increases. Overall, these consumer sensitive businesses saw an increase of more than $2.5 billion in revenue, and a pre-tax earnings increase of $236 million versus the year-ago period.

Signs of the rebound in the housing market were evident in the results. Acme Building Brands, Benjamin Moore (paint), Johns Manville (insulation), Shaw (carpets) and MiTek (roofing) were part of a manufacturing group that saw revenue increase 35% and earnings go higher by 56% versus the year ago period.

Buffett's most direct play on the housing market, home builder Clayton Homes, continues to show some softness. Clayton Homes' revenues in the second quarter increased $28 million (4%) over 2011, with revenue from home sales increasing $40 million (11%) in the second quarter, due primarily to increases in units sold partially offset by slightly lower average prices. Clayton Homes' pre-tax earnings increased $20 million (45%) in the second quarter, benefiting from increased unit sales.

Berkshire said Clayton Homes' operating results continue to be negatively affected by the ongoing soft housing markets and the surplus of traditional single family homes for sale. "Clayton Homes remains the largest manufactured housing business in the United States and we believe that it will continue to operate profitably, even under the prevailing conditions," Berkshire said in its earnings filing.

Burlington Northern revenue climbed from $4.8 billion to $5.1 billion, and its earnings were higher by $110 million versus the year-ago quarter. While shipment of consumer and industrial products was higher, the weakness in the coal market as natural gas continues to replace coal as a source for power generation offset gains made by Burlington in more cyclical industries.

Berkshire shares were higher by close to 1.5% in after hours trading on Friday, which represented a new 52-week high.

-- Written by Eric Rosenbaum from New York.