Warren Buffett’s investment company Berkshire Hathaway Inc. (NYSE: BRK.A) reported a decline in its second-quarter earnings due to a loss on its derivative holdings.
BRK.A’s financial and energy businesses use derivatives to speculate on price movement . However, the bets made by the investment company resulted in losses of more than a billion dollars in the second quarter of 2012.
Berkshire Hathaway reported net earnings of $3.1 billion for the second quarter, compared to $3.4 billion reported for the same period in the previous year.
Operating earnings for the second quarter, which exclude some investment and derivative gains, were $3.7 billion, compared to $2.7 billion reported for the same period in the previous year.
Berkshire’s earnings from its insurance underwriting business came in at $619 million. BRK.A’s Railroads, Utilities and Energy segment also saw improved results.
During the second quarter of 2012, the company bought $1.8 billion of stocks, while it sold $3 billion of stocks.
During the first six months of 2012, Berkshire bought $5.2 billion of stocks. The company had bought 7 million shares of Wal-Mart Stores Inc. (NYSE: WMT) in the first quarter. The investment company bought 10 million shares of Wells Fargo (NYSE: WFC) during the first quarter, and 10 million shares of General Motors Company (NYSE: GM) during the first quarter.
Berkshire’s Class A shares rose 1.73% to finish at $128,479 on Friday. The company’s Class B shares rose 1.78% to finish at $85.58 on Friday.
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