Home » Buffett is still losing money: Berkshire’s third-quarter loss narrows to $2.6 billion in cash reserves – Shangbao Indonesia

Buffett is still losing money: Berkshire’s third-quarter loss narrows to $2.6 billion in cash reserves – Shangbao Indonesia

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Buffett is still losing money: Berkshire’s third-quarter loss narrows to $2.6 billion in cash reserves – Shangbao Indonesia

06 Nov 2022 21:05 PM

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Similar to its second-quarter earnings report, Berkshire posted a net loss attributable to shareholders of $2.688 billion in the third quarter, mainly due to losses in its investment and derivatives portfolio.

[The Paper]”Stock God” Buffett lost again in the third quarter, but the loss narrowed compared with the second quarter. On the evening of November 5, Berkshire Hathaway, at the helm of Buffett, announced its third-quarter results. The company’s revenue in the quarter was US$76.934 billion, a year-on-year increase of 9%, compared with US$70.583 billion in the same period last year; operating profit increased compared with the same period last year. 20% to $7.76 billion; net loss attributable to shareholders was $2.688 billion, a loss of $43.76 billion in the second quarter, and a net profit of $10.344 billion in the same period last year; a loss of $1,832 per Class A share, compared with a gain of $6,832 in the same period last year Dollar.

Similar to its second-quarter earnings report, Berkshire posted a net loss attributable to shareholders of $2.688 billion in the third quarter, mainly due to losses in its investment and derivatives portfolio. However, Berkshire’s third-quarter losses on its investment and derivatives portfolio narrowed significantly to $10.45 billion, compared with a net loss of $53 billion in the second quarter. Net profit in the same period last year was $3.88 billion.

The U.S. Financial Accounting Standards Board (FASB) has revised generally accepted accounting principles (GAAP) to require public companies to consider short-term fluctuations in their stock investments in quarterly and annual reports. This means that price fluctuations in Berkshire’s invested stocks will be reflected in the company’s earnings reports, even if it’s just unrealized paper gains or paper losses.

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Berkshire reiterated its call for investors to pay less attention to the quarterly volatility of its equity investments, noting that any given quarterly amount of investment gains (losses) is generally meaningless and that the net earnings per share figures provided may be of interest to those with knowledge of accounting rules Investors with little or no knowledge are extremely misleading.

From a business perspective, in the third quarter of 2022, Berkshire’s insurance investment income was $1.408 billion, and the utility and energy business’s profit was $1.585 billion, both higher than the same period last year. However, insurance underwritten losses of $962 million and rail business earnings fell to $1.442 billion from $1.538 billion in 2021.

Regarding the reasons for the changes in performance, Berkshire said that the epidemic continues to affect the company’s operations to varying degrees. Supply chain problems caused by geopolitical conflicts have led to rising costs of goods and services in many places around the world. This impact will continue from 2021. Extended to 2022.

In terms of holdings, as of September 30, 2022, the fair value of the company’s equity securities investments was $306.2 billion, while the fair value as of December 31, 2021 was $350.7 billion. About 73% of the total fair value is concentrated in five companies – $20.5 billion in American Express; $126.5 billion in Apple; $31.2 billion in Bank of America; Folong’s stock market value is $24.4 billion; the market value of holding Coca-Cola’s stock is $22.4 billion. In addition, Berkshire holds Kraft Heinz valued at $10.9 billion and Occidental at $11.9 billion.

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It is worth noting that Berkshire included the company’s results for the first time in the third quarter after taking a stake of more than 20% in Occidental Petroleum. Berkshire said in its earnings report that in the first six months of this year, the company acquired about 17% of Occidental Petroleum’s outstanding common stock; in the third quarter, the company acquired additional shares, making Berkshire’s position in Occidental Petroleum in the It was over 20% on Aug. 4.

Buffett also repurchased shares at a modest pace. Berkshire spent $1.05 billion to buy back stock in the third quarter, $1 billion in the second quarter and $5.25 billion in the first three quarters. The company held about $109 billion in cash and short-term securities as of Sept. 30, 2022, up from $105.4 billion at the end of the second quarter and up from $106 billion at the end of the first quarter.

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