Q3 2019 report from Berkshire Hathaway reveals an 11% decline in Warren Buffett’s company’s profit.
Warren Buffett has built a reputation for himself as one of the most successful business owners in the world. However, no matter how good a business is, there will be some bad days. On Saturday, Berkshire Hathaway, a company owned by Warren Buffett announced that its profits fell by 11%. Keep in mind that the company is still worth a lot of money. The reports show that the decline in profit was due to a low increase in the paper value of its investments. Last year, the paper value was $11.66 billion while this year it recorded $8.67 billion.
A Summary Of Berkshire Hathaway’s Q3 2019 Report
The report indicates that Berkshire Hathaway made about $16.52 billion in profit as opposed to the $18.54 billion it made in the third quarter of last year. The price per share also dropped from $11,280 to $10, 119. Even if the profits of the company fell by 11%, its operating earnings increased from $6.98 billion to $7.86 billion. This is a more efficient way of checking the company’s performance according to Buffett. The company’s revenue also increased by 2%.
During the third quarter, the company didn’t make any major acquisitions and it continued to sit on $128 billion in cash. The lack of major acquisition is primarily due to the current condition of the market. When things improve, the company will have enough cash to make meaningful acquisitions that will bring in more profit overall.
Even if the Berkshire Hathaway recorded an 11% drop in profits, Jim Shanahan, a prominent analyst from Edward Jones said that the report isn’t so bad, especially when you consider the ongoing trade war between the United States and China. However, he said that the company should have looked for better ways to utilize its cash and generate revenue during the quarter.