Warren Buffett's Berkshire Hathaway Records $5 Billion Write-Down of Kraft Heinz Stock

Berkshire Hathaway (BRK.A, BRK.B), the conglomerate run by legendary investor and soon-to-be-departing CEO Warren Buffett, on Saturday reported that it had recorded a nearly $5 billion second-quarter write-down of Kraft Heinz shares.

Berkshire—a conglomerate that owns companies including GEICO, BNSF Railway, and Dairy Queen—noted that on May 20, Kraft Heinz said “it was evaluating potential strategic transactions to enhance shareholder value. Berkshire concluded that its unrealized loss “was other-than-temporary,” and it recorded a pre-tax loss of $4.99 billion on the stock.

Omaha, Neb.-based Berkshire reported Q2 operating earnings that slipped nearly 4% year-over-year to $11.16 billion. It ended the quarter with $344.1 billion in cash, cash equivalents, and short-term investments in U.S. Treasury bills, down slightly from $347.7 billion in Q1.

Berkshire said in its quarterly filing with the SEC that it’s unclear how tensions related to trade policy and tariffs will affect its businesses. “It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses, as well as on our investments in equity securities, which could significantly affect our future results,” the company said.

At Berkshire’s annual meeting on May 3, Buffett, the so-called “Oracle of Omaha,” said he would step down from his role as CEO at the end of 2025, and recommended that Vice Chair Greg Abel would take over the role. Berkshire’s board approved Abel as the company’s next CEO the following day.

Berkshire Hathaway’s class B shares have risen just over 4% since the start of the year, lagging the 6% gain by the benchmark S&P 500 index. Last year, Berkshire shares rose 27%, slightly outpacing the broader market.

Read the original article on Investopedia