Berkshire Hathaway reports record quarterly loss thanks to pandemic, but Warren Buffett likely isn't too worried
Berkshire Hathaway took a hit during the coronavirus pandemic, reporting a record net loss of $49.75 billion in the first quarter. But CEO Warren Buffett likely isn't too concerned, CNBC reports.
That's because Buffett considers the company's operating profit, which actually rose 6 percent in the first quarter, to be a better performance measure. Berkshire's losses mainly reflect losses from investments in common stocks, which the company had loaded up on recently because Buffett hasn't been able to settle on any large companies to buy outright over the last four years. Some of those stocks include four major airlines — American, Delta, Southwest, and United — which have plummeted due to the decline in travel.
While the net loss was record-setting for Berkshire, Buffett is never immune to swings like this since an accounting rule requires the company to report unrealized stock losses and gains with earnings. That leads to booms and busts that the CEO considers meaningless, per CNBC.
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Still, many of Berkshire's operating businesses were indeed hurt by the pandemic, and revenues deemed "essential" slowed "considerably" in April. Read more at CNBC.
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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.
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