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A cutout photo of Berkshire Hathaway CEO Warren Buffett welcomes investors and guests as they shop for deals during the first in-person annual meeting since 2019 of Berkshire Hathaway Inc in Omaha April 29, 2022. — Reuters pic

Saturday, 06 Aug 2022 9:59 PM MYT

NEW YORK, Aug 6 — The slide in US stock prices punished Berkshire Hathaway Inc’s bottom line in the second quarter as the company run by billionaire Warren Buffett posted a US$43.8 billion (RM195 billion) loss, though operating results improved with better results from insurance and the BNSF railroad.

Berkshire said today that its net loss was equivalent to US$29,754 per Class A share. It posted a net profit of US$28.1 billion, or US$18,488 per Class A share, a year earlier.

Quarterly operating profit rose 39 per cent to US$9.28 billion, or about US$6,326 per Class A share, from US$6.69 billion, or US$4,424 per Class A share, a year earlier.

Berkshire also repurchased US$1 billion of its own stock in the quarter, and has repurchased US$4.2 billion this year. It ended June with US$105.4 billion of cash and equivalents.

Investors closely watch Berkshire because of Buffett’s reputation, and because results from its dozens of operating units in the insurance, railroad manufacturing, energy and retail sectors often mirror broader economic trends.

Net results, in contrast, swing wildly because the Omaha, Nebraska-based conglomerate must report investment gains and losses on its stock holdings even if it buys and sells nothing.

That proved a drag in the second quarter, as Berkshire recorded US$53 billion of losses from investments and derivatives.

The stocks of three major holdings — Apple Inc, Bank of America Corp and American Express Co — each fell more than 21 per cent.

Buffett urges investors to ignore the fluctuations, and Berkshire will make money if stocks rise over time.

In 2020, for example, Berkshire lost nearly US$50 billion in the first quarter as the Covid-19 pandemic took hold, but made US$42.5 billion for the full year. — Reuters