Mario Anzuoni / Reuters
- Berkshire Hathaway’s Warren Buffett saw an 11% drop in revenue in the second quarter, but nearly $ 30 billion in year-on-year investment gains meant its net income grew 86% to $ 26.3 billion.
- The investor’s famous conglomerate reported $ 13 billion in net sales last year, including its disposal of the ‘big four’ airline shares in April.
- Berkshire also bought back more than $ 5 billion of its stock as expected.
- However, the cash stack is still ballooning by about $ 10 billion to $ 147 billion.
- Visit the Business Insider website for more stories.
Berkshire Hathaway’s Warren Buffett reported an increase in earnings in the second quarter as the rising value of its equity portfolio offset weak parts of much of its business due to the coronavirus pandemic.
The famed investor’s conglomerate also sold more than just its “big four” airline shares last quarter, adding about $ 10 billion to its huge pile of money.
Berkshire reported a 11% drop in revenue to about $ 57 billion as sales fell in both the “insurance and other” and “railways, utilities and energy” divisions. It also faced a $ 10 billion limitation cost on its 2016 acquisition of Precision Castparts.
Read more: ‘The most extreme ratings in history’: A notorious market bear says investors should record for the next 12 years for record-low negative returns – and warns that the current volatility implies a 66% plunge
“The government and private sector’s responses to contain their spread began to significantly affect our operating companies in March and negatively impacted almost all of our operations in the second quarter,” Buffett and his team wrote in the profit statement.
However, that decline was offset by close to $ 30 billion in year-on-year investment gains, which means Berkshire’s net income rose 86% to $ 26.3 billion.
Sell shares and buy Berkshire
Berkshire reported $ 12.8 billion in net sales last quarter, including the $ 6.1 billion it received from the sale of the ‘big four’ airline shares in April.
The conglomerate will publish its portfolio next week in the submission regulations next week, detailing exactly which positions it will sell or leave.
As predicted, Buffett also made more than $ 5 billion in Berkshire stock market purchases in the past four years, a big step up from its $ 1.6 billion in first-quarter purchases.
However, his company’s coffers grew by about $ 10 billion to $ 147 billion, after ballooning by about $ 9 billion in the first quarter.
Read more: BANK OF AMERICA: Buy these 5 products now for profit next year as pandemic uncertainty raises prices and raises gold to $ 3,000
Buffett was widely expected to put Berkshire’s money into work during the coronavirus crash earlier this year. However, the 89-year-old investor highlighted a lack of attractive opportunities at Berkshire’s annual general meeting in May, as the Federal Reserve and US Treasury moved quickly to pump liquidity into the markets and compensate troubled companies.
His inactivity encouraged commentators to dismiss him as too old, too scared, and in need of a new strategy.
Buffett, however, has been more lively in recent weeks. For example, Berkshire struck a $ 10 billion deal to buy most of Dominion Energy’s natural gas assets in early July.
In addition, he spent more than $ 2 billion buying Bank of America shares over 12 consecutive trading days until August 4, which improved Berkshire’s stake in the bank to nearly 12%.
.
