Buffett's Berkshire is recovering from the pandemic and shopping for again extra shares


© Reuters. FILE PHOTO: Berkshire Hathaway chairman Warren Buffett walks through the exhibition hall as shareholders gather to hear from the billionaire at Berkshire Hathaway Inc's annual shareholders meeting in Omaha


From Jonathan stamp

(Reuters) – Warren Buffett's Berkshire Hathaway (NYSE 🙂 Inc said on Saturday that results are recovering from the worst effects of the COVID-19 pandemic and that it is completing its aggressive share buybacks with new buybacks of $ 6.6 billion. USD extended.

First quarter results suggest that the Omaha, Nebraska-based conglomerate, whose dozen operating companies include BNSF Railroad and Geico Auto Insurance, may have seen the worst effects of the pandemic, including losing tens of thousands of Jobs.

In fact, Berkshire said many companies are now seeing "significantly higher" profits and revenues despite the negative impact of February's winter storms, although some companies are still suffering as a result.

The share buybacks allow Buffett to deploy excess capital as acquisitions of entire companies become more difficult. This reflects the high valuations and growth of special-purpose acquisition companies to get companies public.

Berkshire repurchased $ 24.7 billion of its own shares in 2020. In addition, the number of shares in Berkshire declined from March 31 to April 22, suggesting the company repurchased more than $ 1.2 billion worth of shares during that period.

Operating income for the first quarter rose 20% to $ 7.02 billion, or approximately $ 4,600 per Class A share, compared to $ 5.87 billion last year.

Berkshire also reported net income of $ 11.71 billion, or $ 7,638 per Class A share, compared to a net loss of $ 49.75 billion, or $ 30,653 per share, last year.

Last year's results reflected a loss of $ 55.62 billion in investments and derivatives as equity markets slumped around the world.

Under accounting rules, Berkshire is required to report gains and losses on stocks it owns, even when it does not make any purchases and sales.

Manufacturing increased pre-tax profit 15%, with Clayton Homes mobile housing earnings nearly doubling as revenue increased and credit losses decreased.

Meanwhile, pre-tax profits from retailers like Nebraska Furniture Mart and See & # 39; s Candies have more than doubled as Berkshire dealerships sold more vehicles and some results surpassed pre-pandemic levels despite supply chain disruptions.

One unit still struggling is aircraft parts maker Precision Castparts, which took a $ 9.8 billion write-down in 2020 and cut 13,400 jobs.

Berkshire said Precision's quarterly sales were down 36% and sales and earnings should remain "relatively low" in 2021 as aircraft production is unlikely to grow significantly.

Berkshire Class A shares closed at $ 412,500 on Friday after hitting a record high the day before. They rose 19% this year, surpassing the 11% increase, but were 36 percentage points behind the index in 2019 and 2020.

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