Economic downturn squeezes Berkshire Hathaway
Berkshire Hathaway boss Warren Buffett has told shareholders in his annual letter that the US economy will be “in shambles” throughout this year, but declined to speculate on whether the stockmarket would rise or fall.
However the group’s insurance operations remain a comparatively bright spot in a gloomy report on the year to December 31. Berkshire Hathaway’s 2008 net profit stands at $US2.79 billion ($4.36 billion), down 17.2% on 2007.
“Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009 as well,” Mr Buffett wrote.
Insurance is part of a diverse mix of more than 60 companies Berkshire owns, including furniture, carpet, jewellery, restaurants and utility businesses.
Investment and derivative losses of nearly $US7.5 billion ($11.7 billion) helped push group net profit down 62% in the year to December 31 2008, compared with 2007. The figure stands at $US4.99 billion ($7.82 billion).
However the group’s insurance operations remain a comparatively bright spot in a gloomy report on the year to December 31. Berkshire Hathaway’s 2008 net profit stands at $US2.79 billion ($4.36 billion), down 17.2% on 2007.
“Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009 as well,” Mr Buffett wrote.
Insurance is part of a diverse mix of more than 60 companies Berkshire owns, including furniture, carpet, jewellery, restaurants and utility businesses.
Investment and derivative losses of nearly $US7.5 billion ($11.7 billion) helped push group net profit down 62% in the year to December 31 2008, compared with 2007. The figure stands at $US4.99 billion ($7.82 billion).