Warren Buffett at the Berkshire Hathaway Annual Meeting in Los Angeles, California. 05/01/2021.
Gerard Miller | CNBC
Berkshire Hathaway’s operating results continued to rebound as its myriad businesses from energy to railroad benefited from the economic reopening.
The group reported an operating profit of € 6.69 billion in the second quarter.
Total earnings, reflecting Berkshire’s volatile stock investments, rose 6.8% year over year to $ 28 billion in the second quarter.
Chairman and CEO Warren Buffett continued to aggressively buy back Berkshire stocks rather than make larger acquisitions. The company bought $ 6 billion in the second quarter. Berkshire bought a record $ 24.7 billion of its own shares last year.
Berkshire’s cash holdings were $ 144.1 billion at the end of June.
The results came as the conglomerate’s stock made up for all losses in 2020 and hit a record high for the period. So far, Berkshire’s B shares are up another 2% in the third quarter, bringing their year-to-date earnings to over 23%.
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As the pandemic continues to bring economic activity to life and more goods and merchandise are shipped across the country, Berkshire’s Burlington Northern Santa Fe Railroad will benefit. Rail, utility, and energy revenues increased more than 27% year over year to $ 2.26 billion for the period, Berkshire said. The other businesses of the conglomerate, including house builders and a paint manufacturer, are also experiencing an upswing.
However, Berkshire acknowledged that its quarterly results look great as they rebound from low levels a year ago and the company isn’t sure when results will actually normalize.
“The COVID-19 pandemic had a negative impact on almost all of our activities in 2020, and particularly in the second quarter, although the impact varied significantly,” Berkshire said in Saturday’s earnings report. “The extent of the effects over long periods of time cannot currently be reasonably estimated.”
At the height of the Covid crisis, Berkshire saw a drastic slowdown, with operating income plummeting 10% year over year in the second quarter of 2020 and 30% in the third quarter.
Berkshire said the risks of the pandemic remain and could affect results in the future.
“The risks and uncertainties from the pandemic that could affect our future earnings, cash flows and financial condition include the ability to vaccinate significant numbers of people in the US and worldwide, and the long-term impact of the pandemic on demand for certain of our products and services, “said the conglomerate.
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