A slide in U.S. stock prices punished Berkshire Hathaway’s bottom line in the second quarter, as billionaire Warren Buffett’s company posted a $43.8 billion loss, Reuters reported.
Still, Berkshire saw an improvement in operating results, as income from insurance and BNSF railroad offset a loss from auto insurer Geico.
Quarterly operating profit rose 39% to $9.28 billion, or about $6,326 per Class A share, from $6.69 billion, or $4,424 per Class A share, a year earlier.
Rising interest rates helped Berkshire’s insurance units generate more cash from investments, while a stronger US dollar boosted earnings from the company’s European and Japanese investments.
Berkshire’s net loss was $29,754 per Class A share compared with a net profit of $28.1 billion, or $18,488 per Class A share, a year earlier.
Berkshire has slowed its share buybacks, buying $1 billion in the quarter and $4.2 billion so far this year.
It also bought more than $6.1 billion worth of stock, up from $51.1 billion in the first quarter, when it acquired large stakes in oil companies Chevron Corp and Occidental Petroleum Corp.
Investors watch Berkshire closely because of Buffett’s reputation and because the results of its dozens of operating units in the insurance, railroad construction, energy and retail sectors often mirror broader economic trends.
Berkshire ended June with $105.4 billion in cash and cash equivalents. It expects to complete its $11.6 billion acquisition of insurer Alleghany Corp in the fourth quarter.
Net results fluctuate because the group has to report gains and losses on investments in its shares, even if it doesn’t buy or sell anything.
That proved to be a burden in the second quarter, as Berkshire posted $53 billion in losses on investments and derivatives.
Shares of three major holdings Apple Inc, Bank of America Corp and American Express Co each fell more than 21%.
Buffett urges investors to ignore the volatility, stressing that Berkshire will make money if the stock rises over time.
In 2020, for example, Berkshire lost nearly $50 billion in the first quarter as the COVID-19 pandemic took hold, but had a $42.5 billion profit for the full year.
Berkshire owns dozens of businesses that also include its namesake energy operations, several manufacturing companies and consumer companies such as Duracell batteries, Fruit of the Loom underwear and See’s candy.
The company’s shares outperformed the broader US market in 2022, falling 2% compared with the S&P 500’s 13% decline.