In their second-quarter profit, Warren Buffett’s business reported an 87% jump when the value of its investment portfolio increased in the stock market. But, because of the economic impact of the coronavirus pandemic, it took about 10 billion dollars to enter the value of the manufacturing industry of its aircraft components.
Berkshire Hathaway Inc. said Saturday it gained 26.3 billion dollars in the second quarter, or 16,314 dollars in Class A. This rose to 14.1 billion dollars a year earlier, or 8,608 dollars a share. Because the pandemic has damaged air transportation and companies which supported that airline industry, Berkshire has said the value of its Precision Castparts unit is cut.
Buffett long said that Berkshire’s operating income provides an improved view of its quarterly performance as they exclude significantly varying investments and derivatives. By doing so, the operating income of Berkshire declined 10 percent to 5.5 trillion dollars or 3,420,48 dollars for each Class A share, as most of its companies had been affected by the coronavirus pandemic restrictions. That’s less than 6.1 billion dollars, or 3,754.83 dollars per share. FactSet surveyed analysts anticipated a Class A share of $3,182.06 of operating income.
By the end of the second quarter, Berkshire had almost 147 billion dollars of cash and short-term investments, while Buffett spent 5.1 billion dollars on Berkshire’s share repurchases over the quarter. After the quarter ended Buffett found another way of using this cash. He agreed first to purchase $4 trillion in the Dominion Energy pipeline and storage company and take on Dominion debt of $5.7 billion.
Then Buffett acquired Bank of America stock worth approximately $2.1 billion at the end of July and early August to control the bank’s stock at 11.9 percent. Berkshire Hathaway Inc. owns over 90 companies, including railways and insurance companies, utility companies, furniture companies, and jewelry companies. It also invests heavily in companies such as Apple, American Express, Coca-Cola, and Bank of America.
