Options Toolbox

Related Companies Berkshire Hathaway Inc. (BRK.A) CORT Business Services Corp. Kansas Bankers Surety Co. Wesco Financial Corp. (WSC)

Related Documents Earnings Release (ER) Wesco Financial Corp. 9/30/2009, filed on 11/6/2009

Wesco Financial Corp. on Nov. 6 reported consolidated net income of $9.9 million, or $1.39 per share, for the quarter ended Sept. 30, compared to $16.2 million, or $2.27 per share, in the year-ago period.

Investment income totaled $12.3 million, compared to $16.7 million in the year-ago period.

The company noted that declining economic activity and the turmoil affecting the liquidity of the banking system, which became evident in the latter half of 2008, affected its operating results significantly.

Wesco Financial said the decreases in consolidated earnings was mainly due to the weaknesses in CORT Business Services Corp.'s furniture rental and Precision Steel's business due significantly to the recessionary economic environment. The drop also resulted from decreased investment income resulting not only from an ongoing decline in interest rates on short-term investments, but also from a reduction in dividends received.

Partially offsetting the negative impact on Wesco Financial's earnings resulting from these factors are the improved underwriting results of its insurance businesses.

Also, subsequent to Kansas Bankers Surety Co.'s decision late in 2008 to exit the bank deposit guarantee bond line of insurance as rapidly as feasible, the company said outstanding deposit guarantee bonds have been reduced to approximately $80 million, insuring deposits in 27 separate institutions, as of Oct. 31, from an aggregate of $9.7 billion, insuring deposits in 1,671 institutions, as of Sept. 30, 2008. By year-end, outstanding deposit guarantee bonds are expected to be about $50 million or less, insuring 21 or fewer institutions.

Berkshire Hathaway Inc. is the ultimate parent of Wesco Financial.