Recently, Warren Buffett, the billionaire business magnate had predicted that a change in accounting would cause some huge changes in the quarterly earnings of his company. It seems as though his predictions have become a reality. Berkshire Hathway Inc., Warren Buffett's company has reported a loss of $1.1 billion for the first quarter of this year.
The losses came after a new rule that required the company to report any gains or losses that were unrealized in the net income of the company. A net loss of $6.3 billion on investment income was reported by the company for the first quarter.
This is the first loss that has been reported by the company since 2009 although it was not out of the blue.
Buffett warns about a swing in revenue
Buffett had warned about the potential swing in profits due to the new rule in an annual letter he had written in February to the shareholders of the company.
He had also stated that such a loss could affect the figures that represent the performance of the company.
Buffett has urged the investors of the company to turn their focus away from the company's earning and instead, to concentrate on the operating businesses.
He had also stated that in a given portfolio, fluctuations of up to $10 billion can be observed in the stock portfolio.
Buffett has stated that the gains or losses in investments in any given quarter are usually meaningless.
Berkshire owns businesses that range from railroads to industrial manufacturing. In fact, the company owns about 5 dozen businesses. The well-known brands under the company include Duracell, GEICO, and Dairy Queen.
In the first quarter of last year, Berkshire had made a profit of $4.1 billion as compared to the loss in the first quarter of this year.
Wall Street had harbored expectations of $58.7 billion for the first quarter of this year. The company, however, reported a revenue of just $58.5 billion. The figure is 9.1 percent below the $64.4 billion the previous year during the same time frame.
The operated earnings of the company that does not account for certain aspects that do not influence the business health seemed to be more promising. In fact, the company reported operating earnings of $5.3 billion. The figure is up by 49 percent as compared to the $3.6 billion mark the previous year during the same period.