OMAHA, Nebraska, USA (AP) – Warren Buffett’s company reported a 87% jump in its second quarter earnings, as the value of its investment portfolio increased with the stock market, but it had to reduce the value of its aircraft parts manufacturing business at approximately $ 10 billion due to the economic impact of the coronavirus.
Berkshire Hathaway Inc. reported on 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 a share, a year ago.
Berkshire said it cut the value of its Precision Castparts unit because the pandemic has hit air travel and industry businesses.
Buffett has long said that Berkshire’s operating profits offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. By that measure, Berkshire’s operating profit fell 10% to $ 5.5 billion, or $ 3,420.48 per Class A share, as most of its businesses were affected by pandemic-related restrictions. This is less than $ 6.1 billion, or $ 3,754.83 per share a year ago.
Analysts surveyed by FactSet had expected Class A operating earnings per share of $ 3,182.
Berkshire had nearly $ 147 billion in cash and short-term investments at the end of the second quarter, but Buffett used $ 5.1 billion during the quarter to buy back Berkshire shares.
Buffett also found another way to use that money after the end of the quarter. First, it agreed to buy Dominion Energy’s pipeline and storage business for $ 4 billion and take on $ 5.7 billion in debt from Dominion. Subsequently, Buffett’s company purchased approximately $ 2.1 billion in Bank of America shares in late July and early August to give it control of 11.9% of the bank’s shares.