Buffet's Firm Reports $44-B Loss In 2nd Quarter
Warren Buffett’s company reported a $43.76 billion loss in the second quarter as the paper value of its investments plummeted and he bought significantly fewer stocks, but Berkshire Hathaway’s many operating companies generally performed well, Josh Funk reported for the Associated Press (AP).
Photo Insert: Warren Buffett and friend, Bill Gates play a game of pinball.
Berkshire said Saturday that a largely unrealized $53 billion decline in the value of its investments forced it to report a loss of nearly $44 billion, or $29,754 per Class A share. That is down from $28.1 billion, or $18,488 per Class A share, a year ago.
The stock prices of three of Berkshire’s biggest investments — Apple, American Express, and Bank of America — all fell significantly during the second quarter.
Buffett has long said he believes Berkshire’s operating earnings are a better measure of the company’s performance because they exclude investment gains and losses, which can vary widely from quarter to quarter.
By that measure, Berkshire’s earnings were up significantly to $9.28 billion, or $6,312.49 per Class A share from last year’s $6.69 billion, or $4,399.92 per Class A share. The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $4,741.64.
Besides investments, Berkshire owns more than 90 companies outright. Berkshire said operating profits were up at all of its major units including its insurance companies, major utilities, and BNSF railroad.
The strong results at most of its companies offset a $487 million underwriting loss at Geico, which reported bigger auto claims losses because of the soaring value of vehicles and ongoing shortages of car parts.