Buffett's firm reports $12.8 billion loss

OMAHA

Warren Buffett's company has reported a nearly $13 billion loss in the third quarter as the paper value of its investments fell, but the companies it owns — particularly the insurers — generally performed well.

Berkshire Hathaway said it lost $12.8 billion in the quarter. That's significantly bigger than the $2.8 billion loss that it reported a year ago.

But most of those investment losses are unrealized because Berkshire didn't actually sell most of its stocks with its biggest holding being a massive stake in Apple.

Accounting rules require it to include the value of its investments, which it put at $341.1 billion at the end of the quarter, in its earnings.

Last quarter, it said its stock portfolio was worth $353 billion.

That's why Buffett has long said investors are better served focusing on Berkshire's operating earnings, which exclude the value of its investments that can vary widely quarter to quarter. By that measure, Berkshire said its operating profit jumped nearly 41 percent to $10.8 billion. That's up from $7.65 billion a year ago.

Berkshire's insurance unit was helped by relatively low losses related to major catastrophes like hurricanes this year and a rebound in Geico's profits. Altogether, Berkshire's insurers contributed $2.4 billion to its operating profit.

In addition to insurers, the conglomerate owns BNSF railroad, several major utilities and an eclectic assortment of manufacturing and retail firms including aviation parts maker Precision Castparts, See's Candy, Dairy Queen and Helzberg Diamonds.

Buffett continues to sit on a massive pile of cash because he hasn't made any major investments or acquisitions this year. Berkshire had $157.2 billion in cash at the end of the quarter, up from $147.4 billion at the end of the second quarter.