Wed. May 5th, 2021

Coronavirus punishes Warren Buffett, as Berkshire Hathaway takes almost $10 billion writedown

2 min read

Article content continued

At Precision, revenue fell by one-third, and Berkshire said results may suffer more as the unit undertakes an “aggressive restructuring” to shrink operations. Precision ended 2019 with 33,417 employees, meaning it has shed 30 per cent of its workforce.

During the quarter, Buffett, who turns 90 on Aug. 30, also took advantage of Berkshire’s underperforming shares by repurchasing US$5.1 billion of stock, even as the pandemic reduced other companies’ ability to buy back their own shares.

We apologize, but this video has failed to load.

Seifert said investors should welcome the buybacks.

“Berkshire tends to go against the grain, and when so many companies suspended buybacks, Berkshire did the opposite,” she said. “The market should react positively, because it shows Berkshire is confident in its prospects.”

The repurchases confirmed Berkshire’s hint in a July 8 regulatory filing it had become more aggressive with buybacks after loosening its buyback policy in 2018.

Precision was not the only drag on Berkshire, which said the pandemic caused “relatively minor to severe” damage to most of its more than 90 operating businesses, including lower shipping volume at the BNSF railroad and store closures at See’s candies.

Berkshire said it also took a US$513 million charge on its 26.6 per cent stake in Kraft Heinz Co, which on July 30 took writedowns on several of its businesses, including its Maxwell House and Oscar Mayer brands.

Net Income Rises

Quarterly net income rose to US$26.3 billion, or US$16,314 per Class A share, from US$14.07 billion, or US$8,608 per share, a year earlier.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.