points to follow the blue words, don’t get lost~
On August 6th local time, stock god Buffett , Berkshire Hathaway , announced its second quarter financial report and semi-annual report. The report shows that the company's revenue in the second quarter of this year was US$76.18 billion, compared with US$69.114 billion in the same period last year, an increase of 10.2%, and operating profit in the second quarter was US$9.28 billion, an increase of 38.7% compared with US$6.69 billion in the same period last year. This profit is the total profit of various businesses including insurance, railways and utilities owned by the group.
But Berkshire Hathaway net loss attributable to shareholders in the second quarter was US$43.755 billion, compared with a net profit of US$28.094 billion in the same period last year. This is attributed to the company's losses of $66.919 billion in investment and derivatives in the second quarter. In the same period last year, investments and derivatives benefited from US$27.394 billion.
In the first half of 2022, Berkshire's cumulative net loss was US$38.295 billion, compared with a profit of US$39.805 billion in the same period last year.
heavily held stocks dragged down, investment suffered a major loss
While the receivable and net profit of operating businesses are achieving rapid growth, Berkshire still suffered huge losses, mainly due to the company's heavily held stocks that fell sharply in the second quarter.
financial report shows that as of the second quarter of this year, about 69% of Berkshire's holdings were concentrated in five companies: American Express ($21 billion), Apple ($125.1 billion), Bank of America ($32.2 billion), Coca-Cola ($25.2 billion), and Chevron ($23.7 billion). Among them, the three major stocks, including , Apple , Bank of America and , American Express , all fell by more than 20% in the second quarter.
At the end of 2021, about 73% of its holdings were concentrated in four companies: American Express ($24.8 billion), Apple ($161.2 billion), Bank of America ($46 billion), and Coca-Cola ($23.7 billion).
However, the second quarter financial report did not fully disclose the data on Berkshire's holdings changes. Later this month, Berkshire and other large hedge funds will disclose their investment in the second quarter to regulators, namely submitting F13 reports, when investors will receive detailed information on changes in Berkshire's stock portfolio.
In addition, the second quarter financial report also disclosed that Berkshire has acquired 17% of Occupy Oil's existing equity capital, worth US$9.3 billion, which is also a rare large-scale investment by Berkshire in recent years. Occupy Petroleum's share price of rose 97% in the first quarter of this year and 4% in the second quarter.
share price performance is still stronger than broad market
As in the past, Berkshire Hathaway once again called on investors to reduce their quarterly volatility in their equity investments : Any given amount of quarterly investment income (loss) is usually meaningless, and the net earnings per share data provided may be extremely misleading to investors who know little or no knowledge of accounting rules.
Berkshire believes that given the huge scale of the company's equity securities investment portfolio, market volatility and changes in stocks' unrealized profit and loss will have a significant impact on the company's performance. In addition, periodic revaluation of certain assets and liabilities denominated in foreign currencies, as well as asset impairment expenses, may cause cyclical net profit fluctuations. The U.S. Financial Accounting Standards Board (FASB) has revised the GAAP (GAAP) to require listed companies to consider short-term fluctuations in their stock investments in quarterly and annual reports. This means that the price fluctuations in of the stocks invested in will be reflected in the company's performance reports, even if it is only unrealized book gains or book losses.
Berkshire's performance fluctuations also affect the stock price performance. Berkshire's Class A shares fell more than 22% in the second quarter, down nearly 24% from the all-time high set on March 28, while the company's share price rose 17% in the first quarter. The S&P 500 fell by more than 16% in the second quarter, the largest quarterly decline since March 2020. In the first half of the year, the Standard 500 fell 20.6%, the largest drop in the first half of the year since 1970. Overall, Berkshire's stock price has performed better than the market this year.
Berkshire Hathaway's stock price performance (quarterly line)
Editor: Wang Zhaocheng
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