Buffett’s firm reports $44B loss, but its businesses thrive

OMAHA, Neb. (AP) — Warren Buffett’s company reported a $43.76 billion loss in the second quarter as the paper value of its investments plummeted, but Berkshire Hathaway’s many operating companies generally performed well suggesting the overall economy is weathering the pressure from inflation and rising interest rates.

Berkshire said Saturday 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 is down from $28.1 billion, or $18,488 per Class A share, a year ago.

The stock prices of three of Berkshire’s biggest investments — Apple, American Express and Bank of America — all fell significantly during the second quarter. But those stocks have all rebounded during the third quarter, meaning Berkshire’s portfolio is already worth more than it was at the end of the quarter.

Buffett has long said he believes Berkshire’s operating earnings are a better measure of the company’s performance because they exclude investment gains and losses, which can vary widely quarter to quarter. 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.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $4,741.64.

Besides investments, Berkshire owns more than 90 companies outright. Berkshire said operating profits were up at all of its major units including its insurance companies, major utilities and BNSF railroad. The strong results at most of its companies offset a $487 million pretax underwriting loss at Geico, which reported bigger auto claims losses because of the soaring value of vehicles and ongoing shortages of car parts.