Berkshire’s first-quarter net loss was $ 49.75 billion, or $ 30,653 a Class A share, reflecting $ 54.52 billion in losses from investments, especially common stock. A year earlier, net profit was $ 21.66 billion, or $ 13,209 a share.
On the other hand, the quarterly operating profit, which Buffett considers a better performance measure, increased by 6% to $ 5.87 billion, or about $ 3,624 a Class A share of $ 5.56 billion, or about $ 3838 per share.
The accounting base requires Berkshire to report unrealized losses and gains of shares with profits. This causes major fluctuations in the net results of Berkshire that Buffett considers meaningless.
The company resorted to accumulating liquidity and buying shares with very small shares, as the cache recorded 137 billion dollars from 127 billion dollars at the end of 2019, while the company spent only 1.8 billion to buy shares and 1.7 billion dollars to repurchase Berkshire Hathaway shares.
It is noteworthy that the Standard & Poor’s 500 Index fell by 20% in the first quarter, but there were sharp declines in several major holdings in Berkshire including American Express, Bank of America, Bank of Wales Fargo, in addition to four airlines: American and Delta, Southwest, and United.
The company said most of Berkshire’s business was affected by the pandemic, with effects ranging from “relatively slight to severe” to date, and corporate earnings deemed “essential” slowed significantly in April.
Deputy Chairman Charlie Munger told the Wall Street Journal last month that some small businesses in Berkshire could be closed entirely.