Warren Buffett’s net profit jumps 87%, but coronavirus slows business in Q2

By: |
August 8, 2020 8:24 PM

Berkshire Hathaway Inc. said Saturday that it earned $26.3 billion, or $16,314 per Class A share, during the second quarter.

Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely.

Warren Buffett’s company reported an 87% jump in its second-quarter profit as the value of its investment portfolio increased with the stock market, but it took a roughly $10 billion write down on the value of its aircraft parts manufacturing business because of the economic impact of the coronavirus pandemic.

Berkshire Hathaway Inc. said Saturday that it earned $26.3 billion, or $16,314 per Class A share, during the second quarter. That’s up from $14.1 billion, or $8,608 per share, a year ago. Berkshire said it cut the value of its Precision Castparts unit because of how much the pandemic has hurt air travel and businesses that support that airline industry.

Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. By that measure, Berkshire’s operating earnings declined 10% to $5.5 billion, or $3,420.48 per Class A share, as most of its businesses were hurt by restrictions related to the coronavirus pandemic. That’s down from $6.1 billion, or $3,754.83 per share.

The analysts surveyed by FactSet expected operating earnings per Class A share of $3,182.06.

Berkshire was holding nearly $147 billion cash and short-term investments at the end of the second quarter, but Buffett did use $5.1 billion during the quarter to repurchase Berkshire shares. Buffett also found a way to use more of that cash after the quarter ended. First, he agreed to buy Dominion Energy’s natural gas pipeline and storage business for $4 billion and take on $5.7 billion of Dominion debt.

Then Buffett’s company bought roughly $2.1 billion worth of Bank of America stock in late July and early August to give it control of 11.9% of the bank’s stock. Berkshire Hathaway Inc. owns more than 90 companies, including BNSF railroad and insurance, utility, furniture and jewelry businesses. The company also has major investments in such companies as Apple, American Express, Coca-Cola and Bank of America.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1TikTok fate in the balance as judge weighs app store ban
2Persistent Risks: No let-up in cyberattacks as Covid-19 lockdown eases
3Covid-19-induced economic uncertainties: ‘Salaries to have more variable, profit-linked pay’