Despite Big Loss, Berkshire Hathaway’s Operating Earnings Surge


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Operating earnings for the firm came to $9.283 billion in the second quarter of 2022, up 38.8% from the same period last year.
On its investments, however, the corporation reported a $53 billion loss for the quarter.
Investors were once more urged by Warren Buffett to ignore the quarterly changes in its share holdings.

Despite worries about slowing growth, Berkshire Hathaway’s operating profits increased in the second quarter, but Warren Buffett’s conglomerate was not immune to the general market turbulence.

Operating earnings for the conglomerate, which include profits from the many companies it owns, such as insurance, railroads, and utilities, totalled $9.283 billion in the second quarter of 2022, according to a report released by Berkshire on Saturday. It represented an increase of 38.8% from the same quarter a year prior.

On its investments, however, the corporation reported a $53 billion loss for the quarter. The renowned investor pleaded with investors once more to ignore the quarterly changes in its equity holdings.

In a statement, Berkshire stated that “the amount of investment gains/losses in any particular quarter is typically irrelevant and generates statistics for net earnings per share that deliver figures that can be exceedingly misleading to investors who have little to no knowledge of accounting laws

During the second quarter, stocks fell into a bear market as the Federal Reserve aggressively raised interest rates to combat skyrocketing inflation and allay concerns of a recession. The S&P 500 saw its largest quarterly decline since March 2020 with a loss of more than 16 percent. The broad market index experienced its biggest first-half slump since 1970, falling 20.6 percent for the period.

The Class A shares of the company dropped more than 22% in the second quarter, and it is already down close to 20% from its all-time high set on March 28. Nevertheless, Berkshire’s stock is dramatically outperforming the S&P 500, down 2.5 percent vs the equities benchmark’s loss of 13 percent so far this year.

The second quarter’s $1 billion in share repurchases, according to Berkshire, brought the six-month total to $4.2 billion. However, that is a reduced rate of stock repurchases compared to the first quarter, when the business repurchased $3.2 billion of its own stock.

Even though the company has been increasingly active in making deals and choosing stocks, it nevertheless had a sizable cash reserve of $105.4 billion at the end of June.

Since March, the “Oracle of Omaha” has been slowly increasing his holdings in Occidental Petroleum, giving Berkshire a 19.4% interest in the company that is currently valued at $10.9 billion. The S&P 500’s best-performing stock this year has been Occidental, which has seen its price more than double as a result of rising oil prices.

Buffett’s largest transaction since 2016 occurred when the business announced its agreement to purchase insurer Alleghany for $11.6 billion in late March.


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