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Berkshire Bought Back Record $5 Billion of Shares Last Quarter

  • During the second quarter, Warren Buffett’s Berkshire Hathaway Inc. spent a historic $5 billion buying back Berkshire’s own shares.
  • Even with buybacks more than double the previous quarterly high, Berkshire’s cash pile continued to grow and reached $146.6 billion.
  • Berkshire’s companies felt the sting of the coronavirus outbreak, with operating profit in the second quarter declining by 10 percent.
  • Visit The Financial Today’s homepage for more stories.

During the second quarter, Warren Buffett’s Berkshire Hathaway Inc. ($BRKA) spent a historic $5 billion buying back Berkshire’s own shares.

Berkshire ‘s Class A shares, which fell in line with the S&P 500 in the first three months of the year as the pandemic spread in the US, fell another 1.7% last quarter while the broader index rose by 20%. In May, Buffett said repurchases weren’t more compelling, but quarter buybacks suggest his thinking has shifted.

Even with buybacks more than double the previous quarterly high, Berkshire’s cash pile continued to grow and reached $146.6 billion. Buffett has had a hard time finding ways to invest big amounts of funds into higher-return assets.

Berkshire ended up adopting a more cautious approach to the broader stock market in the quarter. He sold a net $12.8 billion in stock in the quarter, including April’s sale of his airline assets.

Berkshire’s companies felt the sting of the coronavirus outbreak, with operating profit in the second quarter declining by 10 percent. The company also took $10 billion in impairment charges in connection with its Precision Castparts business, struck by the air travel downturn in the midst of the pandemic.

Unrealized gains and losses count towards the bottom line in Berkshire’s enormous portfolio of stocks. So the S&P 500’s rally in the second quarter pushed net income to $26.3 billion.

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[Bloomberg]

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