Berkshire Hathaway, a subsidiary of Warren Buffett, reported its first quarterly loss this year.
On November 4th Beijing time, Berkshire released its third quarter report for 2023. According to the report, Berkshire reported a net loss of $12.767 billion in the third quarter of 2023, marking its first quarterly loss this year. The market expects a net profit of $8.946 billion, compared to a net loss of $2.798 billion in the same period last year; The revenue is 93.21 billion US dollars, with a market expectation of 89.882 billion US dollars, compared to 76.904 billion US dollars in the same period last year. The company still achieved a profit of $58.649 billion in the first three quarters of this year, far better than a loss of $40.8 billion in the same period last year.
Berkshire stated that its operations have been affected by geopolitical conflicts, supply chain disruptions, and government actions to mitigate inflation. However, the improvement in insurance business performance boosted operating profit, with a third quarter operating profit of $10.76 billion, a year-on-year increase of 40.6%. Buffett's most important profit indicator is operating profit. He has been calling on investors to reduce their attention to the quarterly fluctuations of his equity investments, pointing out that any given quarterly investment income (loss) amount is usually meaningless, and the provided net earnings per share data may be highly misleading for investors who have little or no knowledge of accounting rules.
Among them, the operating profit from insurance underwriting in the third quarter was 2.42 billion US dollars, an increase of 94% quarter on quarter; The operating profit of insurance investment was 2.47 billion US dollars, an increase of 4.3% quarter on quarter; The operating profit of other holding businesses was $3.34 billion, a decrease of 4.6% quarter on quarter. The operating profit of non-controlling businesses was 226 million US dollars, a 58% decrease quarter on quarter.
The reason for the increase in operating profit but the decrease in net profit is due to a huge investment loss of $24.1 billion in investment income from Berkshire's equity securities holdings in the third quarter. However, the revenue for the first three quarters was still $23.5 billion.
In terms of total asset size, as of the end of the third quarter, Berkshire's total asset size reached $1019.933 billion. In the second quarter, Berkshire's total asset size exceeded $1 trillion for the first time, reaching $1041.573 billion, indicating a slight decrease in the company's total assets in the third quarter.
In the third quarter, Berkshire suffered a loss of $8824 per Class A common share, while a loss of $5.88 per Class B common share.
In addition, Berkshire's total cash holdings at the end of the third quarter were $157.24 billion, a historic high, an increase of 6.67% compared to $130.6 billion at the end of the first quarter.
At the same time, the speed of the company's stock repurchase has slowed down, spending only about $1.1 billion in the third quarter to repurchase stocks, and the cumulative repurchase amount has reached $7 billion so far this year. At the end of September, the float of Berkshire's insurance companies was approximately $167 billion, an increase of $3 billion compared to the end of last year.
As of September 30th, approximately 78% of Berkshire's equity investment fair value was concentrated in five companies, which remained unchanged compared to the previous quarter: Apple, American Express, Bank of America, Coca Cola, and Chevron. Among them, the market value of shares held by American Express is $22.6 billion, the market value of shares held by Apple is $156.8 billion, Bank of America is $28.3 billion, Coca Cola is $22.4 billion, and Chevron is $18.6 billion.
As of November 3rd, Berkshire's A-share closing price was $534132, up 0.66%. It has risen nearly 14% so far this year, and after reaching its historical high on September 19th, its stock price has fallen by about 6% from its peak.