Warren Buffett’s Berkshire reports a loss of $44 billion as the value of its investments falls
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Warren Buffett’s Berkshire Hathaway reported a loss of $43.76 billion in the second quarter as the value of the company’s investments plunged in what was a turbulent quarter for the markets.
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’s down from $28.1 billion, or $18,488 per Class A share, a year ago.
Buffett has long said he believes Berkshire̵[ads1]7;s operating income is a better measure of the company’s performance because it excludes investment gains and losses, which can vary widely from quarter to quarter.
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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.
Berkshire Hathaway CEO Warren Buffett (FBN)
Analysts covering Berkshire expected the company to report earnings per Class A share of $4,741.64.
Berkshire said revenue rose more than 10% to $76.2 billion in the quarter as many of its businesses raised prices.
Berkshire’s many companies continued to perform well, suggesting that the overall economy is holding up to the pressures of inflation and rising interest rates.
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It was a difficult quarter for shares of three of Berkshire’s biggest investments – Apple, American Express and Bank of America.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 165.35 | -0.23 | -0.14% |
| AXP | AMERICAN EXPRESS CO. | 157.51 | +0.64 | +0.41% |
| BAC | BANK OF AMERICA CORP. | 33.96 | +0.56 | +1.68% |
They all fell significantly during the second quarter, but rebounded during the third quarter, increasing the value of Berkshire’s portfolio since the end of the quarter.
A BNSF freight train with 76 container cars and FedEx freight trailers runs from Seattle to points east. ((Photo by William Campbell/Getty Images) / Getty Images)
Besides investments, Berkshire owns more than 90 companies directly. Berkshire said operating profit increased at all its major units, including its insurers, major utilities and BNSF railroad.
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Berkshire reported a pretax underwriting loss of $487 million at Geico, which reported larger losses on autos due to the soaring value of vehicles and ongoing shortages of auto parts.
In this photo illustration, the Government Employees Insurance Company (GEICO) logo is shown on a smartphone. (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images)
Berkshire is often seen as a microcosm of the broader economy because its collection of manufacturing, retail, insurance, utilities and services businesses touch so many different industries, and Berkshire’s profits tend to follow what the economy does.
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Berkshire said it had $105.4 billion in cash at the end of the quarter, which was little changed from the $106 billion it reported at the end of the first quarter.
The Associated Press contributed to this report.
