Warren Buffett’s company reported a loss of nearly $ 50 billion on Saturday due to a sharp drop in the value of its investment paper, although the company still has a huge pile of cash. It is the last sign of the economic toll new coronavirus is having corporate America.
Berkshire Hathaway Inc. said it lost $ 49.7 billion, or $ 30,653 per Class A share, during the first three months of this year. (Berkshire Hathaway has two classes of shares, of which Class A shares are the most expensive and principal shares.) This is less than last year’s first quarter profit of $ 21.66 billion, or $ 13,209 per action. Shares of Berkshire closed at $ 273,262 on Friday.
The biggest factor in the loss was a $ 54.5 billion drop in the value of Berkshire’s investment portfolio, as the stock market plummeted after the coronavirus epidemic began. The previous year, Berkshire’s investments added $ 15.5 billion to the company’s profits.
Buffett has long said Berkshire’s operating earnings offer a better view of its conglomerate’s quarterly performance because they exclude investments and derivatives, which can vary widely. With this measure, Berkshire’s operating profit improved to $ 5.70 billion, or $ 3,617.62 per share, from $ 5.56 billion, or $ 3,387.56 per share. for the quarter.
However, analysts surveyed by FactSet expected better earnings per share on average of $ 3,796.90.
Berkshire revenue grew 1% to $ 61.27 billion. The company also has more than $ 137 billion in cash because Buffett, a famous Wall Street bargain hunter, has struggled to find major acquisitions for the company recently when stock values were at record highs.
Sunday Profile: Warren Buffett
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On Saturday afternoon, Buffett plans to lead an abbreviated “virtual” version of the annual Berkshire annual meeting, with none of the 40,000 shareholders typically attending the festive event. The company happened to an online meeting and canceled all the usual fights surrounding the event due to the coronavirus outbreak. He is expected to answer selected questions from shareholders examined by various journalists.
Berkshire owns more than 90 businesses, including the BNSF Railways and insurance, utilities, furniture and jewelery companies. The company also has significant investments in companies such as Apple, American Express, Coca-Cola and Bank of America.
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