Berkshire Hathaway reported a $43.8 billion second-quarter loss on Saturday, largely driven by the drop in the stock prices of its biggest investments. In the same period last year, Warren Buffett's operation posted a profit of $28.1 billion, the Wall Street Journal reports. Still, Berkshire managed to produce almost $9.3 billion of operating profit in the quarter, per Reuters, an increase from $6.7 billion a year ago. Despite the mixed signals, "the results show Berkshire's resilience," said an analyst at Edward Jones & Co analyst who gives it neutral rating. "It gives me confidence in the company if there is a recession," the analyst said.
The company's portfolio already is up this quarter, per the AP. That's because the stock prices of Apple, American Express, and Bank of America have rebounded after significant declines in the second quarter. Buffett apparently didn't go on any stock-buying binges lately; the company reported having $105.4 billion cash when the second quarter ended, virtually unchanged from the $106 billion it had when the quarter began. Buffett has said operating earnings are a better gauge, and Berkshire said in a statement Saturday, "We believe that investment and derivative gains and losses ... are generally meaningless in understanding" the company's performance.
A big drain on the company was Geico, which had a $487 million pretax underwriting loss. The insurer reported an increase in auto claims losses because of the soaring price of vehicles and the shortage of parts. Another analyst said that result suggests Geico is having more difficulty raising rates to cover the increased costs than its competitors are. Other businesses owned by Berkshire had strong quarters, however. (More Warren Buffett stories.)
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