Warren Buffett’s company reported an 87 percent jump in its second-quarter profit as the paper value of its investment portfolio increased with the stock market, but it took a roughly US$10 billion writedown on the value of its aircraft parts manufacturing business because of the economic impact of the COVID-19 pandemic.
Berkshire Hathaway Inc on Saturday said that it earned US$26.3 billion, or US$16,314 per Class A share, during the second quarter. That is up from US$14.1 billion, or US$8,608 per share, a year earlier.
Berkshire said it cut the value of its Precision Castparts Corp unit because of how much the pandemic has hurt air travel and businesses that support that airline industry.
Photo: AFP
Precision Castparts cut about 10,000 jobs, or about 30 percent of its workforce, during the first half of the year as it responded to the reduced demand.
Buffett has long said that Berkshire’s operating earnings offer a better view of quarterly performance, because they exclude investments and derivatives, which can vary widely.
They also exclude the Precision Castparts writedown.
By that measure, Berkshire’s operating earnings declined 10 percent to US$5.5 billion, or US$3,420.48 per Class A share, as most of its businesses were hurt by restrictions related to the pandemic. That is down from US$6.1 billion, or US$3,754.83 per share.
The four analysts surveyed by FactSet expected operating earnings per Class A share of US$3,182.06.
The pandemic’s impact on Berkshire’s businesses was significant, but Edward Jones & Co analyst Jim Shanahan said it might not have been as bad as expected, partly because Geico Co insurance unit and BNSF Railway Co unit performed well during the quarter.
Berkshire was holding nearly US$147 billion cash and short-term investments at the end of the second quarter, but Buffett did use US$5.1 billion during the quarter to repurchase Berkshire shares, which is the biggest buyback since Berkshire relaxed its policy on repurchases in 2018.
Buffett also found a way to use more of that cash after the quarter ended.
First, he early last month agreed to buy Dominion Energy Inc’s natural gas pipeline and storage business for US$4 billion and take on US$5.7 billion of Dominion debt.
Then Buffett’s company bought about US$2.1 billion worth of Bank of America stock late last month and early this month to give it control of 11.9 percent of the bank’s stock.
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
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