NEW YORK, Nov 7 — Warren Buffett’s Berkshire Hathaway Inc today posted a lower operating profit as the coronavirus pandemic weighed on some of its businesses, though gains in stocks such as Apple Inc fuelled a big quarterly net profit.
The conglomerate disclosed it repurchased a record US$9.3 billion (RM38.4 billion) of its underperforming stock in the quarter, and US$16 billion so far this year, as Buffett remained unable to find huge acquisitions to spur growth.
Berkshire also said that while some businesses are rebounding from the pandemic’s depth, the pain persists at its Precision Castparts aircraft and industrial parts unit, which is expecting thousands of additional job losses.
Third-quarter operating profit fell 32 per cent to US$5.48 billion, or about US$3,488 per Class A share, from US$8.07 billion a year earlier.
Meanwhile, net income rose 82 per cent to US$30.14 billion, or US$18,994 per Class A share, from US$16.52 billion, or US$10,119 per share, a year earlier.
Net results included US$24.77 billion of gains from investments such as Apple, which rose 27 per cent in the quarter and at US$111.7 billion is by far Berkshire’s biggest stock holding.
It appeared nonetheless that Berkshire may have sold some Apple stock in the quarter because the stake should have been a few billion dollars higher, based on previously disclosed stakes, if none of it were sold.
Net results are volatile because an accounting rule requires Berkshire to report gains and losses on its common stock investments even if it does no buying and selling.
The company had posted a US$26.3 billion second-quarter profit, but lost US$49.75 billion in the first quarter. It ended September with US$145.7 billion of cash and equivalents.
Berkshire said most of its operating businesses have been negatively affected by the pandemic, though in the third quarter several experienced significant increases in revenue and earnings from the second quarter.
Year-over-year profit fell just 8 per cent at the BNSF railroad despite lower shipping volumes.
But at Precision, where Berkshire had taken a US$9.8 billion writedown in August, quarterly pretax profit fell 80 per cent, and expects that by year end it will have shed 40 per cent of its workforce.
That equates to roughly 13,400 jobs, or 3,400 more than Berkshire previously disclosed had been lost. — Reuters
