Berkshire Hathaway profits 87% surge despite $10bn writedown.
Warren Buffett’s company reported an 87% jump in its second-quarter profit as the value of its investment portfolio increased with the stock market, but it took a roughly $10 billion write down on the value of its aircraft parts manufacturing business because of the economic impact of the coronavirus pandemic.
Berkshire Hathaway Inc. said Saturday that it earned $26.3 billion, or $16,314 per Class A share, during the second quarter. That’s up from $14.1 billion, or $8,608 per share, a year ago.
Berkshire said it cut the value of its Precision Castparts unit because of how much the pandemic has hurt air travel and businesses that support that airline industry.
Buffett has long said Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. By that measure, Berkshire’s operating earnings declined 10% to $5.5 billion, or $3,420.48 per Class A share, as most of its businesses were hurt by restrictions related to the coronavirus pandemic. That’s down from $6.1 billion, or $3,754.83 per share.
The analysts surveyed by FactSet expected operating earnings per Class A share of $3,182.06.
Berkshire was holding nearly $147 billion cash and short-term investments at the end of the second quarter, but Buffett did use $5.1 billion during the quarter to repurchase Berkshire shares.