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Warren Buffett’s Berkshire Hathaway posted $12.8 billion in losses as the company’s portfolio underperformed, highlighted by the billionaire’s unwillingness to spend on new investments while sitting on over 1,000 cash on hand 157 billion US dollars sat.
The company’s third-quarter loss exceeded the loss in the same period last year, when Berkshire lost $2.8 billion. Despite this significant decline, the company’s portfolio is worth over $341 billion.
Apple, one of the most significant holdings in Berkshire’s portfolio and accounting for nearly half of its value, has fallen $25 per share after reaching a high of about $196.45 per share in July.
However, Buffett has regularly emphasized that investors should not worry about investment performance because the value on the stock market can fluctuate wildly. Instead, he argued that they should measure Berkshire’s success by its operating profits, which were up to $10.8 billion – a 41% increase in value, according to the Associated Press.
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Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., speaks during an interview with Bloomberg Television in New York, Wednesday, August 30, 2017. Buffett said the market rally in recent years has made it more difficult (Christopher Goodney). /Bloomberg via Getty Images / Getty Images)
Analysts had expected Berkshire to report operating profit of $6,540.23 per Class A share, but instead the company achieved $7,437.15 per Class A share.
The company’s core business is instead based on insurance companies and other properties acquired during the year, such as Geico, which has rebounded this year after reporting six straight quarters of losses before 2023. This year, the insurance company posted an underwriting profit of $703 million in the first quarter of 2023 and $514 million in the second quarter of 2023, according to Quartz.
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| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ACGL | ARCH CAPITAL GROUP LTD. | 85.55 | -0.39 | -0.45% |
| BRK.A | BERKSHIRE HATHAWAY INC. | 533,815.00 | +3,475.00 | +0.66% |
| CINF | CINCINNATI FINANCIAL CORP. | 100.88 | +0.99 | +0.99% |
| WRB | WR BERKLEY CORP. | 67.85 | +0.03 | +0.04% |
Geico cited higher premiums due to increased car prices and a decline in both collision claims and advertising budgets as factors in the turnaround in business, which in turn helped boost Berkshire.
Berkshire’s other insurance holdings also benefited from a “quiet” Atlantic hurricane season, meaning fewer losses, according to the New York Times.
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FILE PHOTO: Berkshire Hathaway shareholders walk past a video screen at the company’s annual meeting in Omaha. (Portal/Rick Wilking/File Photo / Portal Photos)
The company’s core businesses also include See’s Candies, Dairy Queen, Helzberg Diamonds, Coca-Cola, American Express, Chevron, BNSF Railroad and several utility companies. BNSF saw a decline in profit compared to the same quarter last year, but it still amounted to $1.2 billion.
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Berkshire sold $5.3 billion more shares than it bought, leaving more cash waiting to invest. One of those purchases included $1.1 billion of treasury stock in the quarter, but that’s down from the first quarter of 2023, when the company repurchased $4.4 billion of treasury stock.
Buffett also increased his stake in Occidental Petroleum, acquiring just 0.7% more shares of the company as shares fell in the final weeks of October. Berkshire had already increased its stake in June, so its total ownership in Occidental is now over 25%.