Berkshire Posts Quarterly Loss

Operating profits climb though results were hurt by rising fuel costs, Hurricane Ian
By Bob Cronin,  Newser Staff
Posted Nov 5, 2022 2:10 PM CDT
Hurricane Ian Hurts Results for Buffett's Berkshire
Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks in 2019 in Omaha.   (AP Photo/Nati Harnik, File)

Despite a strong performance by its businesses in several sectors, Berkshire Hathaway posted a third-quarter loss on Saturday. Warren Buffett's conglomerate announced a net loss of $2.69 billion, the Wall Street Journal reports, following a $10.34 billion profit in the same period last year. Operating earnings, on the other hand, climbed from $6.47 billion last year to $7.76 billion, exceeding forecasts. Buffett has said operating earnings are a better gauge of Berkshire's performance because they don't include investment gains and losses, per the AP, which can have great swings. "The amount of investment gains/losses in any given quarter is usually meaningless," the company said in a statement Saturday, and can mislead investors.

Hurricane Ian, which hit Florida in September, caused a $2.7 billion after-tax insurance underwriting loss, per Reuters. The company said rising fuel costs and accidents hurt results from BNSF railroad and the auto insurer Geico. BNSF could charge customers more per railroad car loaded but then had to deal with rising fuel costs and a drop in overall freight volume, per the Journal. "The concern is which of the rising expenses are going to become more permanent," one analyst said. Berkshire Hathaway ended the quarter with even more cash on hand, $109 billion at the end of September, after having a total of $105.4 billion after the second quarter.

Berkshire bought more of its own stock but in moderation, spending $1.05 billion to repurchase shares. That amount was similar to buybacks in the previous quarter but below last year's levels, per CNBC. The company bought back more shares last month. "On balance, results were strong and demonstrated resilience given the impact of inflation, higher interest rates and supply chain challenges," said Jim Shanahan, an Edward Jones & Co analyst. (More Warren Buffett stories.)

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