Warren Buffetts Berkshire Hathaway posts $44 billion investment loss, but operating profit rises

Warren Buffetts Berkshire Hathaway posts $44 billion investment loss

Berkshire Hathaway’s operating profit jumped 38.8% from a year ago

Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, posted a loss of $43.8 billion in the second quarter of 2022. Despite this, Berkshire made an operating profit of $9.283 billion.

This was achieved by offsetting further losses at car insurer Geico, where parts shortages and rising used car prices have boosted claims, thanks to reinsurance and BNSF railroad gains.

This is an increase of 38.8% compared to the same quarter of the previous year. Profits from the conglomerate’s many industries, including insurance, railroads and utilities, are included in operating profits.

Berkshire said on Saturday that a largely unrealized decline of $53 billion in the value of its investments left it with a loss of $43.8 billion.

A Reuters report quoted James Shanahan, an analyst at Edward Jones & Co, as saying that despite the net loss, “results show Berkshire’s resilience” Shanahan also called Berkshire “neutral.”

Because of Buffett’s reputation and the fact that the performance of the conglomerate’s various operating divisions frequently tracks broader economic trends, investors are paying close attention to Berkshire.

These entities include reliable revenue generators like his namesake energy company, several industrial companies and well-known consumer brands including Dairy Queen, Duracell, Fruit of the Loom and See’s Candies.

A CNBC Report said in the second quarter stocks fell into a bear market as the Federal Reserve aggressively raised interest rates to fight soaring inflation and ease fears of a recession .

Since March, Buffet has slowly increased his stakes in Occidental Petroleum, giving Berkshire a 19.4% stake in the company, currently valued at $10.9 billion.

The best performing stock in the S&P 500 this year has been Occidental, which has seen its price more than double due to rising oil prices.

According to a report in FinancialTimesBuffet reportedly indicated at the conglomerate’s annual meeting in Nebraska in April that the multibillion-dollar stock-buying spree was likely to slow as the year progressed, noting that the environment at the company’s headquarters was become more “lethargic”.

Later this month, when Berkshire and other major fund managers disclose their investments to regulators, investors will receive a more in-depth update on the evolution of the company’s stock portfolio.

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