Berkshire Hathaway posts almost $50B loss after COVID-19
- Author: Darren Santiago May 05, 2020,
May 05, 2020, 0:12
Buffett underscored that the world had changed after the pandemic for the airline industry.
According to a Reuters report, Berkshire said most of its more than 90 businesses are facing "relatively minor to severe" negative effects from COVID-19, the illness caused by the novel coronavirus and now punishing the global economy, with revenue slowing considerably in April even at businesses deemed "essential".
It probably won't rank among the best pump-up speeches of all time, but Berkshire Hathaway CEO Warren Buffett tried to give us a little jolt of optimism Saturday.
Buffett said Berkshire "made a mistake" investing approximately $7 billion to $8 billion in the sector, which was changed "in a very major way" as the pandemic shut down most air travel, through no fault of the airlines.
Berkshire's quarterly operating profit rose 6% to $US5.87 billion, from $US5.56 billion.
Buffett's cautious reaction to the latest crisis drew plenty of attention from investors.
Buffett remains cautious about the current crisis, saying that the range of economic possibilities was "extraordinarily wide".
"We did not take out anything like $7 or $8 billion and that was my mistake", Buffett said at the company's annual meeting which was livestreamed.
But it won't be in us airlines, after Buffett confirmed that Berkshire in April sold its "entire positions" in the four largest: American Airlines Group Inc , Delta Air Lines Inc, Southwest Airlines Co and United Airlines Holdings Inc.
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She said briefings would be held later in the week, but, "they might have a new look to them, a new focus to them". Yet another tweet on Saturday fed rumors that Trump was going to shut down the briefings altogether.
"I don't know the consequences" of shutting down large parts of the US economy, Buffett said, though Berkshire's operating earnings will be "considerably less" than if the virus hadn't hit.
Buffett told investors to "never, ever bet against America", as historically the nation has persisted through hard times.
"It's going to be a odd annual meeting", said Andy Kilpatrick, a retired stockbroker who wrote a Buffett biography and has attended every annual meeting since 1985.
Buffett said Munger is in good health and he will return to the annual meeting next year. "It's been seven weeks since I've had a haircut", he said.
Berkshire Hathaway's AGM is an event that investors across the world wait for.
Abel oversees Berkshire's non-insurance businesses. Nationwide jobless claims have since March 21 totaled about 30.3 million, or 18% of the workforce, a level not seen since the Great Depression.
"We haven't done anything because we don't see anything that attractive to do".
Shareholders also elected Kenneth Chenault, a former chief executive of longtime Berkshire holding American Express Co, to Berkshire's board, making him the company's first African American director.