Berkshire Hathaway Reports Q1 Loss, Flooring Sales Increase
Omaha, NE, May 8, 2018-Berkshire Hathaway reported a net loss of $1,138,000 for Q1 2018, compared to a gain of $4,060,000 in Q1 2017.
Of its building products segment, Berkshire Hathaway said, “Revenues in the first quarter of 2018 were approximately $2.8 billion, an increase of $100 million (4%) compared to 2017. In the first quarter of 2018, we generated increased sales of flooring products, primarily from hard surface volumes, and slightly higher revenues from Johns Manville and MiTek’s residential products business. We also experienced comparative volume declines in 2018 for brick/masonry products, while volumes for paint/coatings were relatively unchanged.
“Pre-tax earnings in the first quarter of 2018 were $251 million, a slight increase (1%) over 2017. Our operating margins (pre-tax earnings to revenues) in the first quarter were 8.9% in 2018 and 9.1% in 2017. Raw material and production costs continued to rise in the first quarter of 2018, which offset most of the increase in revenues. In particular, we experienced higher prices for steel, titanium dioxide, and petrochemicals in 2018, which contributed to the comparative decline in our operating margin.”
This is the company’s first loss in nine years according to Fortune magazine and is the result of accounting rule changes, “The rules, which require Berkshire to report unrealized gains or losses in equity investments in net income, helped fuel a $1.14 billion loss at Buffett’s Berkshire Hathaway Inc. in the first quarter, the Omaha, Nebraska-based company said Saturday in a statement. That marked the company’s first net loss since 2009.”
Pic: Piet Dossche, founder of US Floors, with Warren Buffett at the annual shareholders meeting in Omaha, Nebraska.