(Reuters) – Warren Buffett's Berkshire Hathaway Inc. reported lower quarterly results on Saturday, saying the coronavirus pandemic could cause further damage, even though gains in shares driven by Apple Inc. totaled more than $ 30 billion.  Some operations in Berkshire have recovered from the depths of the spring and analysts were encouraged that revenues fell by only 3% compared to a year earlier.
But COVID-19, hurricanes and low interest rates damaged profits from insurance companies, which include the Geico car insurer and the Precision Castparts aircraft parts, estimated thousands of additional job losses.
Berkshire also repurchased a record $ 9.3 billion of its underperforming inventory in the third quarter, as Buffett still could not find the huge acquisitions the 90-year-old billionaire wants to stimulate growth.
Repurchases amounted to $ 1
"The market will be encouraged by repurchases," said Cathy Seifert, an analyst at CFRA Research with a "hold" rating on Berkshire. "Many companies stopped repurchases to conserve resources during the pandemic, but because Berkshire does not pay dividends, the amount it returns to shareholders will be small."
Operating profit for the third quarter fell by 32% to $ 5.48 billion, or approximately $ 3,488 per A share, from $ 8.07 billion a year earlier.
Net income increased 82% to $ 30.1 billion or $ 18,994 per A share, from $ 16.5 billion or $ 10,119 per share. Revenue was $ 63 billion.
New uses for cash
Berkshire reported $ 24.8 billion in gains from investments such as Apple, whose stock increased 27% during the quarter and to $ 111.7 billion is by far Berkshire's largest shareholding , which accounts for 46% of its portfolio.
However, it seems that Berkshire may have sold some Apple shares because the share should have been a few billion dollars higher, based on previously announced stakes, if none were sold.
Net income is volatile as an accounting rule requires Berkshire to report unrealized gains and losses on its shares. The company reported a profit of $ 26.3 billion in the second quarter but lost nearly $ 50 billion in the first quarter.
Despite repurchases, Berkshire ended the quarter with $ 145.7 billion in cash and the like.
The Omaha, Nebraska-based company has also found new ways to spend cash by investing $ 6 billion in five Japanese trading houses and supporting the initial public offering for data storage company Snowflake Inc.
"It's a good quarter, and "I'm happy with the level of cash distribution," said Jim Shanahan, an Edward Jones analyst with a "buy" rating on Berkshire. "If we have a second wave of pandemics, Buffett is still positioned to take advantage."
Precision, which Berkshire bought in 2016 for $ 32.1 billion in its largest acquisition ever. , has been hit hard by the downturn in the aviation industry, including during the second quarter when Berkshire wrote down a write-down of $ 9.8 billion.
Third-quarter profit before tax fell 80%, and Berkshire expects the unit to have reduced 40% of its workforce by the end of 2019.
That equates to about 13,400 jobs, or 3,400 more than Berkshire previously revealed. had been lost.
While Berkshire did not take any major write-downs during the third quarter, it said the pandemic could force further write-downs.
Insurance profit fell 58% to $ 802 million, reflecting lower premiums in Geico, COVID-19, Hurricanes Laura and Sally, and lower investment income as interest rates fall.
Geico awarded drivers $ 2.5 billion in points on s olicy renewals this year, and Berkshire said its reporting of these credits should hurt insurance results by March 2021.
Earnings fell only 8% at the BNSF Railway, because cost savings helped compensate for lower shipping volumes. "It positions it well when revenue and volumes recover," Shanahan said.
Results improved in Berkshire's energy company and profits in its real estate business more than doubled as low interest rates led more people to buy homes.
More insurance and risk management news about the coronavirus crisis here. Catalog