How Berkshire Hathaway's Biggest Profit Generator Grew by Acquisition
The old Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) made its money as a risk business, primarily earning a profit from writing insurance policies and earning income from investment gains on the float the insurance operations generated. Fast-forward to today, Berkshire Hathaway is more operating company than financial enterprise.
Its manufacturing, service, and retail segment is the single-largest contributor to its earnings power thanks to several large acquisitions in the past decade.
Many of Berkshire's largest acquisitions are clustered in high-tech manufacturers that make everything from chemicals to specialty airplane parts. While these businesses added only marginally to Berkshire's revenue, their high profit margins result in a disproportionate increase in profit for the Omaha, Nebraska-based conglomerate.
Source: Fool.com
