Warren Buffett's Berkshire Hathaway Inc (BRKb.N) on Friday reported a 15-per-cent drop in second-quarter profit, as lower investment gains and a loss from insurance underwriting offset improvement in its BNSF railroad business.

Operating profit also fell short of analyst forecasts, though Berkshire attributed much of the decline to accounting issues, including for currency fluctuations and a major contract with the insurer American International Group Inc.

Net income for Omaha, Nebraska-based Berkshire fell to US$4.26 billion, or US$2,592 per Class A share, from US$5 billion, or US$3,042 per share, a year earlier.

Operating profit declined 11 per cent to US$4.12 billion, or US$2,505 per Class A share, from US$4.61 billion, or US$2,803 per share.

Analysts on average expected operating profit of about US$2,791 per share, according to Thomson Reuters I/B/E/S.

Buffett believes operating income is a better gauge of how Berkshire and its more than 90 businesses are doing than net income, which fluctuates more because it incorporates investment gains, which fell 51 per cent from a year earlier.

Book value per share, Buffett's preferred measure of growth, rose 2.7 per cent from the end of March to US$182,816.

The company's stock price, meanwhile, set a record high on Friday, with Class A shares closing up US$1,629.80 at US$270,000.

"They had a good quarter," said Bill Smead, chief executive of Smead Capital Management Inc in Seattle, which owns Berkshire stock. "The results reflect Berkshire's positioning in the U.S. economy."

BNSF saw profit rise 24 per cent to US$958 million, helped by high single-digit percentage increases in freight revenue from consumer and industrial products, and double-digit increases from agricultural products and coal.

That helped offset a second straight quarterly loss from insurance underwriting, totaling US$22 million compared with a year earlier US$337 million profit.

Berkshire said that weakness reflected losses from currency changes, as well as the amortization of deferred charges from its January agreement to take on many long-term AIG property and casualty risks, in exchange for US$10.2 billion upfront.

That contract helped boost float, or the amount of insurance premiums collected before claims are paid and which help fund Berkshire's growth, to US$107 billion from US$91 billion at year end, Berkshire said.