© Reuters. Berkshire Hathaway shareholders walk past a video screen at the company’s annual meeting in Omaha May 4, 2013. REUTERS/Rick Wilking/File Photo
By Jonathan Stempel
(Reuters) – Warren Buffett’s Berkshire Hathaway (NYSE Inc on Saturday posted its first overall quarterly loss in a year as prices for Apple (NASDAQ ) and other stocks it owns fell, but he said better insurance results helped drive operating profits to a record.
Rising interest rates pushed yields on Berkshire’s vast holdings of U.S. Treasury bills above 5%, while fewer car accidents and a quiet Atlantic hurricane season respectively boosted Berkshire’s insurance and reinsurance businesses. Geico cars.
However, Berkshire noted that it remains cautious about stock valuations and the market environment.
The Omaha, Nebraska-based conglomerate’s cash holding rose in the third quarter to a record $157.2 billion, as Berkshire sold $5.3 billion more in stock than it bought and slowed buybacks of its own shares. , repurchasing 1.1 billion dollars.
Berkshire also reported signs of caution among consumers.
It said its BNSF railroad shipped fewer consumer goods, while lower home buying hurt its namesake real estate brokerage and Clayton Homes unit, and sales of Forest River recreational vehicles and clothing from units like Fruit of the Loom also fell.
Jazwares, a toy maker that makes the popular Squishmallows and which Berkshire bought a year ago, helped offset those declines, generating $469 million in revenue in the quarter.
Investors follow Berkshire closely because its results often reflect broader economic trends and because of Buffett, 93,’s reputation as one of the world’s greatest investors.
LARGE COLLUCES
Berkshire’s third-quarter net loss quadrupled to $12.77 billion, or $8,824 per Class A share, from $2.8 billion a year earlier.
The results included $23.5 billion in investment losses, primarily reflecting a 12% drop in the share price of iPhone maker Apple, in which Berkshire had a $177.6 billion stake.
Berkshire’s bottom line varies widely from quarter to quarter because accounting rules require the company to report investment gains and losses even if it doesn’t buy or sell anything.
Buffett says volatility is usually meaningless, and Berkshire appears to have retained its stake in Apple.
Operating profit rose 41% to $10.76 billion, or $7,444 per Class A share, from $7.65 billion a year earlier.
The insurance operations generated $4.89 billion in profits, compared to just $336 million the previous year, when it lost $2.7 billion from Hurricane Ian alone.
Forest fire losses
Among other companies, BNSF, which often accounts for about a fifth of Berkshire’s operating profits, saw its net income fall 15% to $1.22 billion.
Profits at Berkshire’s energy businesses fell 69% to $498 million as utility PacifiCorp forecast more losses from litigation over wildfires in the western United States.
Berkshire said it could not predict the impact on its HomeServices of America unit of an Oct. 31 jury verdict that awarded home sellers $1.78 billion over an alleged conspiracy among several defendants to inflate broker commissions. .
It also said geopolitical risks around the world could affect future results, although its IMC metals unit, which makes many of its products in Israel, has not yet been affected by the war between that country and Hamas.
Buffett has led Berkshire since 1965. His net worth of $117.5 billion is ranked fifth in the world by Forbes magazine.
Berkshire shares are up 14% this year, matching the .
