Warren Buffett's company reported a $43.76 billion loss in the second quarter as the paper value of its investments plummeted and he bought fewer stocks, but Berkshire Hathaway's many operating companies generally performed well.
Berkshire said on Saturday that 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. A year ago, it was down from $28.1 billion, or $18,488 per Class A share.
Buffett believes that 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. Berkshire's earnings went up significantly to $9.28 billion or $6,312 by that measure. A Class A share from last year's $6.69 billion, or $4,399. 92 per share of Class A. The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $4,741. Berkshire owns more than 90 companies outright, besides investments. Berkshire said its operating profits were up at all of its major units including its insurance companies, major utilities and BNSF railroad. Berkshire said it was sitting on $105.4 billion cash at the end of the quarter, which was little changed from the $106 billion it reported at the end of the first quarter. That signaled that Buffett wasn't buying nearly as many stocks during the second quarter, although it has invested several billion in the Occidental Petroleum stock. Berkshire spent more than $51 billion on stocks in the first three months of the year. Warren Buffett says that this is the biggest mistake people make with their money and psst: it has to do with savings.