Profit up 87% at Buffett's Berkshire, but coronvirus slows businesses

Coronavirus punishes Warren Buffett as Berkshire Hathaway takes big writedown

Inc on Saturday announced a $9.8 billion writedown and 10,000 job losses at its Precision Castparts aircraft and industrial parts business, as the coronavirus pandemic caused widespread pain for Warren Buffett's conglomerate.

Second-quarter operating profit fell to $5.51 billion from $6.14 billion a year earlier.

Berkshire was reportedly holding $147 billion cash and short term investments in the second quarter, of which, $5.1 billion was used by Warren Buffett to repurchase Berkshire shares. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Berkshire's net loss was US$49.75 billion in the first quarter.

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.

The company is greatly invested in many companies that have rallied because the broader stock current market bottomed in late March.

To be certain, Berkshire warned of the uncertainty presented to its firms by the ongoing coronavirus pandemic, noting: "The threats and uncertainties resulting from the pandemic that might impact our potential earnings, funds flows and economic problem include things like the nature and length of the curtailment or closure of our numerous amenities and the extensive-time period influence on the demand from customers for our merchandise and services". Berkshire made some more investments after the June quarter.


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

Unrealised gains and losses in Berkshire's massive stock portfolio count toward the bottom line.

Revenue fell 11 per cent to US$56.8 billion, with larger declines at BNSF and Berkshire's own aircraft units, including NetJets.

But the group's earnings before interest and taxes, a measure generally considered more representative of its health, fell by more than 10 percent to $5.5 billion. It was $ 6.1 billion (about Rs 45,775 crore) in the year-ago quarter.

Like all auto insurers, Geico benefited from lower claims because there were fewer accidents as people drove less with many people working from home.

Buffett has since deployed some cash, agreeing to buy some Dominion Energy gas assets for $4 billion and adding more than $2 billion of Bank of America Corp stock.

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