Berkshire Hathaway's 1Q Earnings Halved Year-on-Year... Buffett Also Faces 2 Trillion Won Stock Loss

1Q Net Profit Only $5.4 Billion... Down from $11.7 Billion YoY
Russia's Invasion of Ukraine and Inflation Impact Cool Investment Sentiment

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Berkshire Hathaway, the investment company led by Warren Buffett, known as the 'Oracle of Omaha' in the global stock market, reported that its first-quarter net profit has halved compared to the previous year. Due to the stock market cooling caused by Russia's invasion of Ukraine, it is reported that losses exceeding 2 trillion Korean won occurred solely in stocks.

The New York Times (NYT) reported on the 30th (local time) that Berkshire Hathaway earned a net profit of $5.4 billion (approximately 6.8 trillion Korean won) in the first quarter of this year. This figure represents a decline of more than 53% compared to the $11.7 billion net profit in the first quarter of last year. It also fell short of the market expectation of $6 billion.

The main reason for Berkshire Hathaway's halved net profit is reported to be losses from stock investments in the first quarter. While the company earned $5 billion from stock investments in the first quarter of last year, it suffered a loss of $1.6 billion in the first quarter of this year. The NYT analyzed that Berkshire Hathaway's losses in stock investments were influenced by the cooling of overall investment sentiment in the stock market due to Russia's invasion of Ukraine and rising inflation.

However, the businesses operated by Berkshire Hathaway showed solid performance even during the economic downturn. In particular, manufacturing and sales sectors saw a 16% increase in profits compared to the same period last year. Additionally, Berkshire Hathaway significantly increased its investments in energy companies.

As of the end of last year, Berkshire Hathaway held shares worth $4.5 billion in the U.S. oil major Chevron, but by the end of the first quarter, the size of its stake had increased substantially to $26 billion.

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