Warren Buffett's company posts almost $50bn loss, sells airline stocks

Warren Buffett's company posts almost $50bn loss, sells airline stocks

Warren Buffett's company posts almost $50bn loss, sells airline stocks

Billionaire investor Warren Buffett on Saturday said the United States' capacity to withstand crises provides a silver lining as it combats the coronavirus, even as he acknowledged that the global pandemic could significantly damage the economy and his investments.

Warren Buffett, CEO of Berkshire Hathaway, told shareholders on Saturday that he sold $6 billion in airline stock -the company's entire equity position in US airlines.

But he said Americans have persevered and prospered through such crises as the Civil War in the 1860s, the influenza pandemic a century ago and the Great Depression, and the "American tailwind" would help them do it again.

Buffett is expected to answer shareholder questions at the meeting. Still, Berkshire's operating profits were 6 percent higher than in 2019, reaching $5.87 billion.

Vice Chairman Charlie Munger told The Wall Street Journal last month that Berkshire might close a few small businesses.

The UK's Berkshire Hathaway Inc's equity position in the U.S. airline industry is estimated at several billion dollars and includes United, American, Southwest, and Delta Airlines.

"We haven't done anything because we don't see anything that attractive to do". A year earlier, net earnings totaled $21.66 billion, or $13,209 per share. The year before, Berkshire's investments added $15.5 billion to the company's profits.

Berkshire's first-quarter net loss was $49.75 billion, or $30,653 per Class A share, reflecting $54.52 billion of losses on stock and other investments.

Berkshire's revenue grew 1 per cent to $61.27 billion. Its stock price has fallen 19% in 2020, compared with a 12% drop in the Standard & Poor's 500, despite Buffett's prediction that Berkshire would outperform in down markets.

On Saturday, Berkshire Hathaway reported its first-quarter earnings results, revealing that its cash pile has grown to $137.263 billion, up from $127.997 billion.

The two men likely will be asked about the almost US$50 billion loss that Berkshire reported Saturday morning and the huge pile of cash the company is holding.

Buffett also announced Saturday that his company had sold all its stakes in four major USA airlines last month, as the pandemic clobbered the travel industry.

"Our position will be to stay a Fort Knox", Buffett said during the meeting.

Berkshire Hathaway's annual meeting will be livestreamed and will include an abbreviated version of the question-and-answer session Buffett normally leads. Berkshire closed several of its retail businesses, such as See's Candy and the Nebraska Furniture Mart, this spring while BNSF railroad and its insurance and utility businesses continued operating.

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