(Reuters) – Warren Buffett's Berkshire Hathaway Inc. said on Saturday that many of its companies are experiencing strong recovery from the early depths of the coronavirus pandemic, resulting in a recovery in profits and revenue.
The company Mr. Buffett has been pushing since 1965 also signaled the billionaire's confidence in his future by repurchasing $ 6 billion of his own shares during the second quarter, although the stock price regularly set new highs. years when economic activity plummeted, jobs were lost and buyers stayed at home.
But now Berkshire said its BNSF railways, named car dealers and homes are among many companies seeing "significant" recoveries despite supply chain disruptions and higher costs, with revenues and revenues in some cases peaking pre-pandemic levels.
Another sign of improvement was Berkshire's decision not to repeat a caution in its previous quarterly results that other operating units still had adverse effects from the pandemic.
Operating profit for the second quarter increased by 21
Net income rose 7% to $ 28.1 billion, or $ 18,488 per A share, offset by unrealized gains on Berkshire's $ 192 billion investment in Apple Inc., Bank of America Corp. and American Express Corp.  Revenue rose 22% to $ 69.1 billion. Berkshire also owns companies such as the car insurance company Geico and See & # 39 ;s Candies.
The results were "quite strong, reflecting a broad economic strength," said Jim Shanahan, an analyst at Edward Jones. He rates Berkshire "buy" and raised its profit forecast until 2022.
Many American companies have improved earnings as the economy recovers.
This month, Goldman Sachs raised its 2021 profit forecast for Standard & Poor & # 39 ;s 500 companies, which expects 45% annual growth.
The second quarter was also notable for Buffett revealing that Berkshire's next CEO would be Greg Abel, vice president who oversees Berkshire's non-insurance business. Buffett turns 91 on August 30
Berkshire's repurchases, including at least $ 1.7 billion in July as the number of shares fell further, total share repurchases increased to about $ 39 billion since the end of 2019.
Mr. Buffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of specialty companies, which take private companies public, make buying entire companies seem too expensive.
"It's a killer," Buffett said at Berkshire's annual meeting on May 1, referring to the SPAC.
Values may also have played a role in Berkshire selling $ 1.1 billion more shares than it bought during the quarter. , despite the repurchases.
Berkshire's share price will rise 23.7% in 2021, surpassing the S&P 500's gain of 18.1%, after rising the index significantly in 2019 and 2020.
"It is very clear that they have a hard time taking capital in public markets, ”said Shanahan. "Given the valuation of the stock, we should expect Berkshire's repurchase to be the preferred source of capital expansion."
BNSF's profits increased by 34% to $ 1.52 billion as retailers replenished inventory and demand swelled for construction products, grain and coal.
Vehicle sales in the first half increased by 30% at Berkshire Hathaway Automotive dealers.
Home purchases also recovered, increasing quarterly reported profit by 43% on Clayton Home's motorhomes and 129% on Berkshire's real estate agents.
The broker is part of Berkshire Hathaway Energy, where wind power tax deductions helped increase profits by 17%. . Rivals including Allstate Corp. and Progressive Corp. has also reported more accidents.
Berkshire also said that revenue fell by Precision Castparts, the aircraft and industrial parts manufacturer, which it wrote down by $ 9.8 billion in 2020 when airlines reduced orders for aircraft. It said a major recovery is not likely soon because customers have enough parts. Catalog