By Jonathan Stempel
(Reuters) -Berkshire Hathaway's stock price set a record high on Monday, rising 3.4% after the conglomerate run by billionaire investor Warren Buffett said quarterly operating profit topped $10 billion for the first time.
In its second-quarter earnings report on Saturday, Berkshire said rising interest rates boosted profit from fixed-income investments, including a cash stake that grew to $147.4 billion, while fewer accident claims bolstered Geico car insurance.
That helped offset declining profit at the BNSF railroad, and lower earnings from building products companies such as Clayton Homes as well as consumer businesses such as Forest River recreational vehicles and Duracell batteries.
Buffett's company, based in Omaha, Nebraska, also posted quarterly net income of $35.9 billion, reflecting unrealized gains on investments such as Apple (NASDAQ:AAPL), whose stock price rose 17.6% in the quarter.
Berkshire owned $177.6 billion of the iPhone maker's shares at the end of June.
Class A shares of Berkshire rose $18,320 to $551,920 on Monday, giving Berkshire a market value of about $799 billion.
The shares earlier reached $555,800, surpassing the previous high $544,000 set on March 28, 2022.
Buffett owns about 15% of Berkshire's stock. He passed Microsoft (NASDAQ:MSFT) co-founder Bill Gates on Monday to become the world's fifth-richest person, with a $121.5 billion fortune, according to Forbes magazine.
UBS analyst Brian Meredith (NYSE:MDP), who rates Berkshire "buy," raised his 12-month price target for the Class A shares to $621,591 from $608,000, calling the stock "an attractive play in an uncertain macro environment."
Keefe, Bruyette & Woods analyst Meyer Shields, who rates Berkshire "market perform," raised his price target to $565,000 from $545,000.
Berkshire has never split its Class A shares. Its Class B shares normally trade at about 1/1,500th as much.
In 2023, Berkshire shares have risen 18%, the same as the Standard & Poor's 500.
The shares no longer routinely trounce the index as they did when Berkshire was smaller, but over long periods can match or slightly outperform the index with less volatility.
Buffett, 92, has run Berkshire since 1965.
His conglomerate also includes namesake energy, car dealership and real estate brokerage businesses, several manufacturing and industrial businesses, and consumer brands such as Dairy Queen, Fruit of the Loom and See's Candies.