Nov 5 (Reuters) – Berkshire Hathaway reported a third-quarter loss of $2.69 billion (€2.70 billion) on Saturday, inflation, plunging investment and a steep loss from Hurricane Ian offset the improvement in many of the conglomerate’s businesses.
The quarterly net loss amounted to 1,832 dollars per Class A share, against a profit of 10.34 billion dollars, or 6,882 dollars per share, a year earlier.
Warren Buffett’s company, however, posted operating profit up 20% to $7.76 billion, or about $5,294 per Class A share, beating analysts’ forecasts. Berkshire Hathaway benefited from rising demand and prices for new homes, industrials and energy, while the US Federal Reserve’s inflation-fighting campaign helped Berkshire generate more income from its insurance investments.
“Overall results were strong and showed some resilience given the impact of inflation, rising interest rates and supply chain challenges,” Jim said. Shanahan, an analyst at Edward Jones & Co, who gave Berkshire a buy rating.
Berkshire Hathaway took advantage of the stock market decline to add new stocks to its $306 billion portfolio, buying a net $3.7 billion and building a 20.9% stake in Occidental Petroleum Corp.
The conglomerate also bought back more of its own shares but remained cautious, with $1.05 billion, similar to the second quarter.
This conservatism may reflect the “significant disruptions” that several dozen companies are still experiencing, according to Berkshire Hathaway, in supply chains and due to events such as the COVID-19 pandemic and the war in Ukraine.
Rising fuel and accident costs hurt the respective results of two of its best-known companies, railroad BNSF and car insurer Geico.
CFRA Research analyst Cathy Seifert, which gave Berkshire a “hold” rating, said the company could find itself “at an inflection point, much like the economy,” where it will need to contain costs to prepare for slowing demand and a possible recession.
“At the end of the day, it was a healthy quarter, but there are concerns about its trajectory over the next 12 months,” Cathy Seifert said.
The results include $10.45 billion in investment and derivatives losses, as many large Berkshire investments other than Apple Inc. fell in price (Reporting Jonathan Stempel in New York, French version Kate Entringer )