Warren Buffett's Berkshire Hathaway swung to a $49.7 billion (€44.8 billion) loss in the first three months of the year, as the sharp sell-off in global stock markets hammered its investment portfolio.
The sprawling industrial conglomerate disclosed on Saturday that its stock portfolio, which includes shares in blue-chip groups such as Apple and Bank of America, declined by $55.5 billion in value in the quarter alongside the 20 per cent drop in the S&P 500.
That decline more than offset the improvement in underlying earnings at Berkshire, which owns railroad Burlington Northern Santa Fe, insurer Geico and chocolate maker See’s Candies. Operating profits rose 5.7 per cent from a year earlier to $5.9 billion, as investment gains from its insurance business climbed.
“The amount of investment gains [AND]losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” the company said in a statement.
Berkshire’s cash pile swelled to a record $137 billion and the group shifted a large portion of that into US Treasuries in the first quarter, a filing with US regulators showed.
Mr Buffett has for more than four years struggled to invest that cash in one of the major acquisitions for which the company is known. The so-called Oracle of Omaha has blamed high equity valuations in previous letters to investors as one of the main reasons the company has remained on the sidelines, as other large publicly traded groups went on acquisition sprees in recent years.
Shares of Berkshire have fallen 19 per cent this year to $273,975.
- Copyright The Financial Times Limited 2020