قالب وردپرس درنا توس
Home / Business / Berkshire Hathaway Q1 earnings are growing, but Kraft Heinz is missing

Berkshire Hathaway Q1 earnings are growing, but Kraft Heinz is missing



Berkshire Hathaway (BRK-A, BRK-B) reported first-quarter results, which appear to be slightly stronger than analysts expect.

First quarter operating income increased from $ 5.29 billion a year ago to $ 5.55 billion. This was higher than analysts expected $ 5.29 billion. (Note that the operating income does not include quarterly profits or losses from Berkshire's investment and derivatives portfolios.)

It is very important to note that Berkshire's results do not reflect the impact of Kraft's recent (KHC) problems , In February, the packaged food company reported weak profits and made weak predictions. reported a massive $ 15.4 billion in impairment charges, primarily related to the Kraft and Oscar Mayer brands; announced that he had received a SEC summons regarding his accounting practice; and announced a dividend reduction. Share crashed in the news.

<p class = "Canvas Atom Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "[19659004] [ Click here to read the coverage of the Annual General Meeting of Berkshire Hathaway 2019 .] "data-responsid =" 18 "> Click here for coverage of the 2019 Berkshire Hathaway Shareholders' Meeting [19659005].]

"Kraft Heinz has not filed the 2018 Form 10-K on the Securities and Exchange Commission on May 3, 2019. In addition, Kraft Heinz Berkshire has not provided the financial statements for the first quarter of 2019. Accordingly, Berkshire does not have the necessary financial information to determine its stake in Kraft Heinz's earnings for the first quarter of 2019. As a result, Berkshire's other operating income excludes this amount in the first quarter of 2019. "

On Saturday, Berkshire CEO Warren Buffett told reporters it was" pretty unusual "that a company had not yet filed its 10-K. Many businesses of Berkshire Hathaway ” class=”StretchedBox W(100%) H(100%) ie-7_H(a)” src=”https://s.yimg.com/ny/api/res/1.2/.Plv8sjO2w_wfqm4fBDvkw–~A/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9ODAwO2lsPXBsYW5l/https://img.huffingtonpost.com/asset/5ccd9482240000a0002c3c8c.png.cf.jpg” itemprop=”url”/>

Many businesses of Berkshire Hathaway

As mentioned previously, Berkshire Hathaway's end result has become much more volatile lately, not because its business model has changed. Rather, it is the accounting.

A recent change in generally accepted accounting principles (GAAP) by the Financial Accounting Standards Board (FASB) requires companies to consider short-term fluctuations in their holdings in the quarterly results. These are referred to as unrealized gains and losses – unrealized as they are paper losses rather than actual losses (or realized gains and losses) resulting from the sale of those securities.

"This requirement will cause some truly wild and capricious fluctuations in our GAAP balance sheet," Buffett said in his 2017 Letter to Shareholders. "Berkshire owns $ 170 billion of marketable stock (excluding our Kraft-Heinz -Shares). The value of these positions may increase slightly by $ 10 billion or more over a quarterly reporting period. Including these magnitudes in the reported net result floods the truly important numbers that describe our operational performance. For analytical purposes, Berkshire's "profit" will be useless. "

" [N] Either the deputy chairman of Berkshire, Charlie Munger, or I think this rule is reasonable, "Buffett wrote to shareholders on the first page of his letter from 2018." Rather, we both have time and again Assuming that this mark-to-market change in Berkshire would lead to what I have termed as "wild and capricious fluctuations in our bottom line."

What must investors do when they read the quarterly Profit and Loss Statement of a Company That Holds Many Holdings

"Our advice is to focus on operating income, while paying no attention to any gain or loss."

Berkshire Hathaway Annual General Meeting

<p class = "canvas-atom canvas-text Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Sam Ro is an Editor at Yahoo Finance. Follow him on Twitter : @SamRo "data-reactid =" 95 "> Sam Ro is Editor-in-Chief at Yahoo Finance Follow him on Twitter : @ SamRo

<p class = "Canvas Atom Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Read More : "data-reactid =" 96 "> Learn More :

Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Follow Yahoo Finance on Twitter Facebook Instagram Flipboard SmartNews LinkedIn YouTube and [19659053] reddit . "data-reactid =" 103 "> Follow Yahoo Finance on Twitter Facebook Instagram Flipboard [19659048] SmartNews LinkedIn YouTube and Reddit [1 9659055].
Source link