Over the weekend, Berkshire Hathaway (BRK-B) posted its first quarterly operating earnings decline since Q3 2020. While the quarterly underperformance is likely temporary, hurt by insurance claims, investors should listen to Warren Buffett’s warnings.
Buffett said the U.S. trade “should not be a weapon.” He viewed the country as already winning, starting from nothing to becoming an important country. He said that trade could be an act of war.
The Administration is currently in a trade war with all of its partners. Vietnam (VNM), China, and Japan face steep tariffs. Mexico and Canada, which are the nearest trading partners, faced tariffs on the automotive sector. Last week, however, the U.S. softened the 25% automotive tariffs. This gave Ford Motor (F) and General Motors (GM) stock a lift. Foreign firm Hyundai Motor (HYMLF) also traded higher after it posted strong quarterly sales.
Berkshire posted a 14.1% drop in operating earnings to $9.64 billion. The quarterly increase in cash, at a record level of $347.68 billion, is a warning to investors. The firm said that operating results may be affected in future periods. It cited the impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events.
Berkshire also tempered its forecast. It said that product costs, supply chain costs and efficiency, and customer demand for our products and services for the reasons for the uncertainty.