Denver Star investor Warren Buffett’s holding company Berkshire Hathaway reports a big jump in operating profit. This increased in the second quarter by almost 39 percent to 9.3 billion dollars and includes the profits from the subsidiaries of the conglomerate.
The group from Omaha in the US state of Nebraska includes an energy and an insurance division and around 80 small and medium-sized companies, from the textile manufacturer “Fruit of the Loom” to the private aircraft rental company “Net Jet” and the candy manufacturer “See’s Candy”.
But the company also reported a $53 billion loss on its stock portfolio. The bottom line at Berkshire Hathaway was a loss of $43.7 billion in the second quarter.
“The investment gains or losses in the quarter are mostly meaningless,” Buffett said when the earnings were released on Saturday. He has long disliked the fact that he has to report unrealized book profits from the many shareholdings, which often fluctuate greatly, every quarter.
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After significant interest rate hikes by the US Federal Reserve (Fed), the markets slipped into a bear market in the second quarter. The broad S&P 500 fell 16 percent from April through June, down almost 21 percent for the first half of the year — its biggest loss since 1970. Buffett’s well-publicized stock portfolio was worth $328 billion at the end of June, down $63 billion than the end of March.
>> Read here: Is It Worth Copying Warren Buffett’s Investing Strategies? – Eight cautionary tales
The Berkshire paper also felt the uncertainty of investors. The Class A stock is the most expensive in the US and fell 22 percent in the second quarter. On an annual basis, however, Berkshire stock is significantly better than the S&P 500, down 2.5 percent since early January, while the benchmark index is down 13 percent. The stock slipped around 1.2 percent in after-hours trading on Saturday and cost $434,100.
Warren Buffett is expanding oil investments
Buffett was also more hesitant about stock buybacks in the second quarter. Berkshire bought back $1 billion worth of securities in the first three months of the year, $3.2 billion – significantly less than 2021. At that time, buybacks totaled $27.1 billion. Cash reserves were $105.4 billion at the end of June, down only slightly from the first quarter.
Berkshire has increased its ongoing investment in oil company Occidental Petroleum in recent months. Buffett now owns 19.4 percent of the shares, which are worth around $11 billion. Occidental is the most successful stock in the S&P 500. The price has more than doubled since the beginning of the year. Analysts are speculating that Buffett could take over the company entirely.
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