Carl Icahn has an exceptional track record, but his portfolio struggled in 2014, bogged down by energy investments despite the strong performance of Apple, another major position in his portfolio. Apple didn’t do well enough to balance out the negative impact from the tumbling oil prices, and as a result, Icahn’s firm sustained an annual loss—the first one since 2008.
Icahn’s profits take a hit
Chelsey Dulaney of MarketWatch reports that Icahn Enterprises posted losses of $3.84 per unit or $478 million in the fourth quarter. In the fourth quarter of 2013, the firm turned a profit of $1.90 per unit or $222 million. Icahn’s revenue plunged 31%, falling to $3.37 billion. In all of 2014, Icahn Enterprises recorded $221 million in net losses, compared to 2013’s $1 billion in net profits.
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The firm posted a loss of $1.07 billion from investment activities. In the previous year, Icahn enjoyed a gain of $143 million. The big problem for Icahn in the December quarter was plummeting oil prices, which Icahn said had a negative impact on profitability in several of the firm’s segments. The price of oil has tumbled about 50% since hitting its peak in June of last year.
Among the weak performers in Icahn’s portfolio is Chesapeake Energy. The company’s shares have plunged almost 30% over the last year. The firm also holds shares of Transocean, which also plummeted in 2014, falling 63%. Other big energy positions in Icahn’s portfolio were Talisman Energy and CVR Energy, according to Forbes‘ Nathan Vardi.
Looking ahead, Icahn remains bullish on energy companies for the long term. The activist investor thinks energy sector investors will turn a “great amount of profit” over the next few years, although he warned that oil prices will probably continue falling for now.
Wins with Apple
Carl Icahn has been talking up Apple for years now, and the company is his biggest position. The consumer electronics giant’s stock has skyrocketed over the last year, gaining 73%. If it hadn’t been for Apple, the damage to Icahn’s portfolio from the energy investments would have been much, much worse.
Icahn is predicting solid sales for the upcoming Apple Watch and the rumored Apple car, which the company has remained mum about as the rumors and speculations have made their way around Wall Street.