World-renowned investor Warren Buffet’s Berkshire Hathaway on Saturday reported net income of minus $ 2.69 billion in the third quarter of the year, up from a profit of $ 10.34 billion last year.
Operating income increased 20% to $ 7.76 billion, from $ 6.47 billion in the same period last year, according to the third quarter report.
Net income included a $ 10.45 billion loss from investments and derivatives, as the share prices of many of the investment firm’s investments fell.
Accounting rules require Berkshire to report changes in value – regardless of whether the shares are sold or bought – which can cause large fluctuations in quarter-to-quarter results.
Buffet himself repeats that investment losses in a given quarter are normally “negligible”.
Stock accumulation
The holding also took the opportunity to buy more shares in the quarter, including a $ 3.7 billion net purchase in oil company Occidental Petroluem, which is now owned at 20.9%.
Berkshire also spent $ 1.05 billion to buy back its stock, meaning the company has now spent a total of $ 5.25 billion to buy back stock this year. In the second quarter, the company repurchased shares for $ 1 billion.
The conglomerate writes in the report that it sees “significant disruptions” in supply chains, while rising inflation impacts the results of the railway company BNSF and auto insurance company Geico.
Dry gunpowder
92-year-old Warren Buffet has ruled Berkshire with an iron fist since 1965, and several investors closely monitor Berkshire’s performance as the holding’s many companies often mirror broader economic trends.
At the end of the third quarter, the company had a cash balance of $ 109 billion, up from $ 105.4 billion at the end of the second quarter.
Since the start of the year in 2022, Berkshire’s shares are down 4%, compared to a 21% decline in the S&P 500.
