Berkshire Hathaway reports first loss in seven years

Before you go, we thought you'd like these...
Before you go close icon

It's official. Berkshire Hathaway (BRK.A) lost money last quarter. Warren Buffett mentioned the possibility of a loss at the company' annual meeting, but the complete figures have now been given to the public and filed with the SEC.

Berkshire lost $1.53 billion compared to a profit of $940 million last year. Revenue dropped almost 10 percent to $22.78 billion.

The company said that the damage was mostly done by the weak economy and losses on derivatives contracts and high yield bonds.. Much of this was tied to junk bond losses due to bankruptcies in companies that issued the bonds, but Berkshire was hurt by investments in stock index futures. The majority of these do not mature for several years. Accounting rules force the write-downs anyway.

There is one irony in the earnings announcement. Buffett has been vocal in his criticism of derivative investments. He can explain away the part of Berkshire's losses due to the economy. He has to face the fact that he did not "walk the walk" on risky financial instruments.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners