OMAHA — Berkshire Hathaway Inc. reported a 77 percent drop in third-quarter earnings Friday as an unrealized derivative loss of $1.05 billion weighed on profits for Warren Buffett’s company and insurance profits fell.

Berkshire generated $1.06 billion net income, or $682 per share in the quarter ending Sept. 30. That’s down from $4.55 billion net income, or $2,942 per share, the Omaha-based company reported a year ago.

Berkshire’s per-share earnings are lower than what the two analysts polled by Thomson Reuters expected; on average, the two analysts predicted $1,429.19 per share on average.

But last year’s third quarter was helped by a large investment gain from the sale of PetroChina stock that generated a roughly $3.5 billion gain for Berkshire.

Berkshire officials do not typically comment on earnings reports, and a spokeswoman did not immediately respond to a message left Friday afternoon.

Berkshire said it generated $81 million in insurance underwriting profits in the most recent quarter, down from the $486 million its insurance units, which include Geico and General Reinsurance, generated in the same period a year ago.

Berkshire began the year with an unrealized $1.67 billion derivative loss in the first quarter. The value of Berkshire’s derivatives, which are tied to the value of the overall markets and the credit health of certain companies, improved in the second quarter by $654 million. In the third quarter, the value of Berkshire’s derivatives fell $1.05 billion, leaving a net loss of $2.21 billion through the first nine months of the year.

But Berkshire has no plans to sell the long-term derivative contracts before they mature, and Buffett has predicted they will ultimately be profitable.

Berkshire’s derivatives fit into two major categories. Berkshire will have to pay on some of the contracts if certain U.S. entities default on their credit. Most of the other derivatives will be paid only if certain stock indices are lower in 15 or 20 years than they were when the contract was written.

Berkshire finished the third quarter with $33.4 billion cash on hand. That is up from the end of the second quarter when the company had $31.2 billion cash on hand.

Berkshire and Buffett have made several deals over the past two months that will make use of some of that cash, but most of the big investments, including a $5 billion investment in Goldman Sachs and a $3 billion stake in General Electric, were announced either at the very end of September or in October. So those deals aren’t reflected in this quarter’s results.

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