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Monday, March 04 2024

Warren Buffett’s company posts nearly $50bn loss, sells airline stocks

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warren M 352020Washington: American business tycoon Warren Buffett’s company, Berkshire Hathaway Inc. has reported a net loss of nearly $50 billion in the first quarter amid the COVID-19 pandemic, while it also sold off all its airline stocks.

The net loss totalled to $49.75 billion in the first quarter, or $30,653 dollars per Class A share and $20.44 per Class B share, compared with a net earning of $21.66 billion a year ago, Xinhua news agency quoted Berkshire as saying in a statement on Saturday.

The first-quarter operating earnings rose to $5.87 billion from $5.55 billion dollars, it added.

“As efforts to contain the spread of the COVID-19 pandemic accelerated in the second half of March and continued through April, most of our businesses were negatively affected, with the effects to date ranging from relatively minor to severe,” the statement said.

Berkshire has taken “necessary” actions to mitigate the economic losses due to lower “consumer demand for products and services”, it said, adding that the company could not “reliably predict” when its many businesses would return to normal or when consumers would resume their former buying habits.

At a virtual shareholder meeting also on Saturday, Buffett announced that his conglomerate has sold all its airline stocks, sending an alarming signal to industry devastated by the global pandemic.

“The world has changed for the airlines,” he said.

“And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way. It turned out I was wrong about that business.”

The Berkshire Hathaway previously held shares of United Airlines, American Airlines, Southwest Airlines and Delta Airlines, worth over $4 billion last December, but stocks were down this year by 69.7 per cent, 62.9 per cent, 45.8 per cent, and 58.7 per cent, respectively, according to a report from CNBC.

Berkshire, a US multinational conglomerate holding company, is based in Omaha, Nebraska.

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