OMAHA – Billionaire Warren Buffett’s Berkshire Hathaway on Saturday posted its first overall quarterly loss in a year as the prices of Apple and other stocks it owns fell, but said improvement in its insurance operations boosted operating profit to a record.
Though its businesses fared better overall, Berkshire signalled caution about valuations, as its cash stake swelled to a record US$157.2 billion (S$212 billion) in the third quarter, when it sold US$5.3 billion more stocks than it bought.
Berkshire slowed repurchases of its own stock, buying back US$1.1 billion in the third quarter.
Investors watch Berkshire closely because its results often reflect broader economic trends, and because of Mr Buffett’s reputation as an investor.
The third-quarter net loss more than quadrupled to US$12.77 billion, or US$8,824 per Class A share, from US$2.8 billion a year earlier.
Results included US$23.5 billion of losses from investments, primarily reflecting a 12 per cent decline in the stock price of Apple, in which Berkshire had owned a US$177.6 billion stake.
Berkshire’s net results swing widely from quarter to quarter because accounting rules require the company to report investment gains and losses even if it buys and sells nothing.
Mr Buffett says the resulting volatility is usually meaningless.
Operating profit rose 41 per cent to US$10.76 billion, or US$7,444 per Class A share, from US$7.65 billion a year earlier.
Insurance operations generated US$4.89 billion of profit, as the Geico car insurer and reinsurance businesses made money after posting losses in 2022, while rising interest rates boosted income generated from US Treasuries.
Berkshire also benefited from a relatively quiet Atlantic hurricane season, which reduced catastrophe losses, unlike in 2022 when it lost US$2.7 billion from Hurricane Ian.
The conglomerate also owns dozens of other businesses, including the BNSF railroad, several energy companies, Dairy Queen ice cream, Duracell batteries, Fruit of the Loom underwear and See’s candies.
Mr Buffett, 93, has run Berkshire since 1965. His US$117.5 billion net worth ranks fifth worldwide, according to Forbes magazine.
Berkshire shares are up 14 per cent in 2023, matching the Standard & Poor’s 500. REUTERS
