Berkshire Hathaway BRK earnings for the second quarter of 2022

Berkshire Hathaway’s operating profit jumped in the second quarter despite fears of slowing growth, but the Warren Buffett conglomerate was not immune to general market turmoil.

Berkshire reported Saturday morning that the conglomerate’s operating profit – which includes profits from countless group-owned businesses such as insurance, railroads and utilities – was $9.283 billion in the second quarter of 2022. It represents a 38.8% increase over the same quarter of the year. Past.

However, the company recorded a loss of $53 billion on its investment during the quarter. The legendary investor once again asked investors not to focus on the quarterly fluctuations in his stock investments.

“The magnitude of investment gains/losses in any quarter is usually meaningless and provides figures on net earnings per share that can be highly misleading for investors with little or no knowledge of accounting rules,” Berkshire said in a statement.

Shares tumbled in a bear market during the second quarter after sharp interest rate increases by the Federal Reserve to tame spiraling inflation raised fears of a recession. The S&P 500 posted a quarterly loss of more than 16% – its largest drop in a single quarter since March 2020. For the first half, the broader market index fell 20.6% for the largest drop in the first half since 1970.

Class A stock fell more than 22% in the second quarter, and is now down nearly 20% from its all-time high on March 28. However, Berkshire stock is significantly outperforming the S&P 500, down 2.5% versus the stock index’s 13% year-to-date loss.

Berkshire said it spent nearly $1 billion in share buybacks during the second quarter, bringing the six-month total to $4.2 billion. However, this is a slower repurchase pace than that seen in the first quarter, when the company repurchased $3.2 billion of its stock.

The conglomerate showed a massive cash hoard of $105.4 billion at the end of June even though the giant has been more active in closing deals and picking stocks.

The Oracle of Omaha has been steadily adding to its stake in Occidental Petroleum since March, giving Berkshire a 19.4 percent stake in Occidental worth about $10.9 billion. Oxidental has been the best performing stock in the S&P 500 this year, doubling in price on the back of higher oil prices.

In late March, the company said it had agreed to buy Afghan Insurance Company for $11.6 billion, marking Buffett’s largest deal since 2016.