Berkshire bought back record $5bn of stock last quarter

Buffett Bought Up His Own Stock While Selling Others Amid Rally

Warren Buffett takes $10bn hit and slashes 10,000 jobs at parts maker

Second-quarter operating profit fell to US$5.53 billion, or about US$3,463 per Class A share, from US$6.14 billion, or US$3,757 per share, a year earlier.

That was a rise of $US36 billion from the March quarter.

Jim Shanahan, an analyst at financial advisors Edward Jones, estimated that Berkshire repurchased about $2.4bn more of its own stock in July. That's down from $6.1 billion, or $3,754.83 per share. It is a great turnaround for the company which reported a huge first-quarter loss. Also, a $2.5 billion in premium reductions Geico is offering customers because of the lower claims will be spread over the coming year as people renew policies instead of taking effect all in the second quarter when most other insurers sent refunds.

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Correction: This tale has been up-to-date to reflect Berkshire's functioning profits fell 10% to $5.51 billion.

Part of the rise was due to Buffett quitting his bet on the USA airline industry by selling $US6 billion of stock in the quarter as airline stocks plunged because of the pandemic. He sold a net $12.8 billion of shares in the quarter, including dumping his airline holdings in April.

The share repurchase is the most ever in a single period for Buffett and almost double the $2.2 billion worth of shares the conglomerate bought back in the final quarter of 2019.

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Berkshire, led by Chairman and CEO Warren Buffett, stated it repurchased $5.1 billion well worth in inventory in May well and June, break up in between $4.6 billion of Class B fairness and $486.6 million in Class A equity. Despite the company's record buybacks previous quarter, the Berkshire's dollars hoard grew to extra than $140 billion. Unrealized gains in the stock holdings accounted for a $34.5 billion gain.

Buffett also found a way to use more of that cash after the quarter ended. First, he agreed to buy Dominion Energy's natural gas pipeline and storage business for $US4 billion and take on $US5.7 billion of Dominion debt. Buffett's company booked a $10bn impairment charge tied to its Precision Castparts business in the second quarter, and warned that it might take a vaccine to get that market back to more normal levels. Berkshire also holds a large stake in companies such as Apple, American Express, Coca-Cola and Bank of America. JPMorgan Chase is up more than 27% over that time period and Amazon has jumped more than 66%.

Berkshire ended up taking a more cautious approach to the broader stock market in the quarter.

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Aerospace Woes Berkshire continued to feel the pain of the airline industry upheaval, even after dumping its stock holdings in four of the major US airlines.

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