Berkshire Hathaway posts $43.8 billion loss as stock holdings tumble

"Businesses are performing well despite higher interest rates, inflation pressures and geopolitical concerns," he said. "It gives me confidence in the company if there is a recession."

Investors closely watch Berkshire because of Buffett's reputation, and because results from the Omaha, Nebraska-based conglomerate's dozens of operating units often mirror broader economic trends.

Those units include steady earners such as its namesake energy company, several industrial companies, and familiar consumer brands such as Dairy Queen, Duracell, Fruit of the Loom and See's Candies.

DISRUPTIONS PERSIST

In its quarterly report, Berkshire said "significant disruptions of supply chains and higher costs have persisted" as new COVID-19 variants emerge and because of geopolitical conflicts including Russia's invasion of Ukraine.

But it said direct losses have not been material, despite higher costs for materials, shipping and labor.

Net results suffered from Berkshire's $53 billion of losses from investments and derivatives, including declines of more than 21% in three major holdings: Apple Inc, Bank of America Corp and American Express Co.

Accounting rules require Berkshire to report the losses with its results even if it buys and sells nothing.

Buffett urges investors to ignore the fluctuations, and Berkshire will make money if stocks rise over time.

In 2020, for example, Berkshire lost nearly $50 billion in the first quarter as the pandemic took hold, but made $42.5 billion for the full year.

"It shows the fickle nature of markets," said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, who invests more than $8 billion, of which 17% is in Berkshire. "It's business as usual at Berkshire Hathaway."

The Standard & Poor's 500 fell 16 percent in the quarter.

GEICO LOSSES

Berkshire's quarterly net loss was equal to $29,754 per Class A share, and compared with a net profit of $28.1 billion, or $18,488 per Class A share, a year earlier.

The $9.28 billion of operating profit, or about $6,326 per Class A share, rose 39 percent from $6.69 billion a year earlier. It included $1.06 billion of currency gains on foreign debt. Revenue increased 10 percent to $76.2 billion. Geico suffered a $487 million pre-tax underwriting loss, its fourth straight quarterly loss.

"All auto insurers have been dealing with inflation in claims costs," Seifert said. "Geico has been less successful than some at passing through rate increases and retaining customers."

The loss was more than offset by a $976 million pre-tax gain in property and casualty reinsurance, and a 56 percent jump in after-tax in insurance investment income to $1.91 billion.

Profit rose 10 percent at BNSF, with higher revenue per car from fuel surcharges partially offsetting lower freight volumes, while profit from Berkshire Hathaway Energy rose 4 percent.

Berkshire repurchased just $1 billion of its own stock, down from $3.2 billion in the first quarter, and compared with $51.7 billion in 2020 and 2021. Its $6.15 billion of stock purchases fell from $51.1 billion in the first quarter, when it took major stakes in oil companies Chevron Corp and Occidental Petroleum Corp.