Buffett says Berkshire Q1 operating profit falls

OMAHA, Nebraska (Reuters) - Berkshire Hathaway Inc's first-quarter operating profit fell about 12 percent from a year earlier, as the recession depresses results at most of the insurance and investment company's businesses, Chief Executive Warren Buffett said on Saturday.

Operating profit may total about $1.7 billion, down from $1.93 billion a year earlier, Buffett told shareholders at Berkshire's annual meeting in its Omaha, Nebraska hometown.

Book value per share, a key measure of Berkshire's health, fell about 6 percent from year end, as the value of Berkshire's stock investments fell and losses on its derivatives contracts grew. That comes on top of a 9.6 percent decline last year, the biggest drop since Buffett began running the company in 1965.

Losses on the derivatives will be reflected in net earnings, but are not part of operating results.

Buffett said Berkshire's cash stake fell to about $22.7 billion on March 31 from $25.5 billion at year end. The company is best known for its insurance operations, but has close to 80 operating businesses, including several closely tied to the housing market. Berkshire expects to report results on May 8.

(Reporting by Jonathan Stempel and Lilla Zuill, editing by Jackie Frank)