Warren Buffett’s Berkshire Hathaway reported a $43.76 billion loss in the second quarter as the value of the company’s investments plummeted, in a turbulent quarter for the markets.
Berkshire said Saturday that a largely unrealized decline of $53 billion in the value of its investments forced it to report a loss of about $44 billion, or $29,754 per Class A share. That’s down from $28.1 billion, or $18488 per Class A share, a year ago.
Buffett has always said he believes Berkshire operating profit It is a better measure of a company’s performance because it excludes investment gains and losses, which can vary widely from quarter to quarter.
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By this scale, Berkshire profits soar significantly to $9.28 billion, or $6312.49 per Class A share, from $6.69 billion last year, or $4399.92 per Class A share.
Analysts covering Berkshire had expected the company to report operating earnings per Class A share of $4,741.64.
Berkshire said its revenue grew more than 10% to $76.2 billion in the quarter as prices increased for many of its businesses.
Many Berkshire companies are still doing well, indicating that the macro economy is overcoming the pressure of inflation and rising interest rates.
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It was a rough quarter for the three stocks of Berkshire’s biggest investment – Apple, American Express and Bank of America.
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They all declined significantly during the second quarter, but rebounded during the third quarter, boosting the value of Berkshire’s portfolio since the end of the quarter.
Besides investments, Berkshire directly owns more than 90 companies. Berkshire said operating profit rose across all of its major units, including insurers, major utilities and BNSF Rail.
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Berkshire reported a $487 million pre-tax underwriting loss at Geico, which reported larger losses in auto claims due to higher vehicle values and an ongoing shortage of auto parts.
Berkshire is often seen as a microcosm of the broader economy because its range of manufacturing, retail, insurance, utilities and services businesses touches many different industries, and Berkshire’s profits tend to follow everything the economy does.
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Berkshire said it held $105.4 billion in cash at the end of the quarter, which wasn’t much changed from the $106 billion it reported at the end of the first quarter.
The Associated Press contributed to this report.
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