Berkshire Hathaway, the conglomerate run by Warren Buffett, reported its first overall quarterly loss in a year on Saturday due to falling prices of Apple and other stocks it owns, although it said improvements in its insurance operations boosted operating profit to a record. Have given.
Its broad portfolio of businesses ranging from insurance to energy to consumer goods like See’s Candies generally performed better in the third quarter than the same quarter a year earlier. And Berkshire’s cash stake rose to a record $157.2 billion in the third quarter, when it sold $5.3 billion more stocks than it bought.
Berkshire also slowed repurchases of its own stock, repurchasing $1.1 billion in the third quarter.
Investors keep a close eye on Berkshire because its results often reflect broader economic trends and because of Mr. Buffett’s reputation as a savvy investor.
Third-quarter net loss quadrupled to $12.77 billion from nearly $2.8 billion a year earlier.
The results included a $23.5 billion loss on investments, mainly reflecting a 12 percent decline in Apple’s share price as of September 30, in which Berkshire owned a $157 billion stake.
Berkshire’s net results vary widely from quarter to quarter because accounting rules require the company to report investment gains and losses even if it doesn’t buy or sell anything. Mr. Buffett says the resulting volatility is usually meaningless.
Operating profit rose 41 percent to $10.76 billion from $7.65 billion a year earlier.
Insurance operations posted a profit of $4.89 billion, as Geico car insurer and reinsurance businesses made money after 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 disaster losses, unlike 2022 when it suffered $2.7 billion in losses from Hurricane Ian.
But revenue at its BNSF freight railroad fell 15.3 percent in the quarter due to lower volumes and higher non-fuel expenses. Its businesses related to the housing market also saw a decline due to rising mortgage interest rates and fewer existing homes for sale, as well as a decline in demand for mortgage refinancing. Revenue from its real estate brokerage business declined 13.8 percent in the third quarter.
Berkshire also reported that revenue from its apparel and footwear business fell 11.2 percent due to a decline in customer demand.
Mr Buffett, 93, has run Berkshire since 1965. His net worth of $117.5 billion ranks fifth worldwide according to Forbes magazine.
Berkshire shares have gained 14 percent this year, matching the return of the S&P 500.