Buffett's Berkshire has first loss since 2001
NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc posted its first quarterly loss since 2001, hurt by losses on derivative contracts and a big investment in the oil company ConocoPhillips.
The net loss for the Omaha, Nebraska-based insurance and investment company was $1.53 billion, or $990 per Class A share, and compared with a profit of $940 million, or $607, a year earlier.
Excluding investments, operating profit fell 12 percent to $1.71 billion, or $1,100 per share, from $1.93 billion, or $1,247. That profit was in line with the $1.7 billion that Buffett estimated at Berkshire's annual meeting last Saturday.
Analysts on average expected operating profit of $1,087 per share, according to Reuters Estimates. Revenue fell 9.5 percent to $22.78 billion.
Results reflected $2.01 billion of writedowns on investments, including $1.9 billion tied to ConocoPhillips.
Buffett invested $7.01 billion in the company's stock, but in February admitted that the decision reflected "terrible timing," coming ahead of a plunge in oil prices from their record high near $150 a barrel. Berkshire said it sold 13.7 million shares in the first quarter and more thereafter, and is likely to sell additional shares at a loss.
Results also included $986 million of losses from derivatives contracts, including $675 million of payments tied to junk bond defaults as a result of several corporate bankruptcies. Berkshire said it has since made another $450 million of payments because of other defaults.
Berkshire has disclosed hundreds of derivatives contracts designed to make money if stock indexes rise and higher-risk bonds do not default. The losses exist on paper but accounting rules require Berkshire to report them with earnings.
Berkshire's book value, or assets minus liabilities, fell to $102.8 billion from $109.3 billion at year end. Book value per Class A share fell 6.1 percent to $66,248.
In Friday trading, Berkshire's Class A shares closed up $905 at $95,295, while its Class B shares rose $80 to $3,132.
REUTERS
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