Buffett’s Berkshire Hathaway Reports Nearly $50 Billion Loss

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The brutal drop in the net - to a loss of $49.75 billion from a profit past year of $21.7 billion - resulted primarily from the virus-related decline in value of its broad investment portfolio, which ranges from energy to transport to insurance and technology.

Like many other US businesses, Berkshire Hathaway's (NYSE:BRK.B) (NYSE:BRK.A) Q1 was shaping up as a good quarter, until the COVID-19 pandemic hit in mid-March.

Some analysts and longtime Berkshire stockholders say numerous beaten-down companies over the past month are the types of firms that don't fit Berkshire's investment criteria.

The biggest factor in the loss was a $54.5 billion loss on the value of Berkshire's investment portfolio as the stock market declined sharply after the coronavirus outbreak began.

Quarterly operating profit, which Buffett considers a better performance measure, rose 6% to $5.87 billion, or about $3,624 per Class A share $5.56 billion, or about $3,388 per share. That's down from last year's profit of $21.66bn, or $13,209 per Class A share. The shift reflected $US54.5 billion in investment losses, compared to a $US15.5 billion gain in the same period previous year.

In documents filed Saturday, Berkshire noted that until mid-March many of its companies were posting "comparative revenue and earnings increases" over the same 2019 period.

Berkshire, which owns companies including Geico auto insurer, Burlington Northern Santa Fe railroad, Dairy Queen, Duracell, and many other financial, industrial, and consumer firms, has been hit hard by the COVID-19 pandemic.

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Several of its businesses including railroads, utilities, and insurance have been deemed essential and allowed to continue operating, but their revenues "slowed considerably" in April.

Berkshire added that the fallout will likely continue in the current quarter.

"As efforts to contain the spread of the COVID-19 pandemic accelerated in the second half of March and continued through April, most of our businesses were negatively affected, with the effects to date ranging from relatively minor to severe", Berkshire said in the filing.

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Class A shares closed Friday at $275,800, down 18.8% for the year.

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