Buffett’s Berkshire earnings rebound, buys back more stock

NEW YORK: Warren Buffett’s Berkshire Hathaway Inc said on Saturday its earnings are rebounding from the worst effects of the COVID-19 pandemic and that it has extended its aggressive stock repurchases with $6.6 billion of new buybacks.

A 20% increase in first-quarter operating profit suggests that the Omaha, Nebraska-based conglomerate, whose dozens of businesses include the BNSF railroad and Geico auto insurance, may already have suffered the worst effects of the pandemic, which included the loss of tens of thousands of jobs.

Indeed, Berkshire said many businesses are enjoying “considerably higher” earnings and revenue, while others such as the Precision Castparts aircraft parts unit still struggle.

The $6.6 billion of stock repurchases in the quarter allow Buffett to deploy excess capital, as high valuations and the growth of special purpose acquisition companies make takeovers of whole companies more difficult.

More buybacks likely occurred from March 31 to April 22 because Berkshire’s share count declined, and may have exceeded $1.2 billion. Berkshire repurchased $24.7 billion of its own stock in 2020. Quarterly operating profit rose to $7.02 billion, or about $4,600 per Class A share, from $5.87 billion a year earlier.

Net income of $11.71 billion, or $7,638 per Class A share, compared with a year-earlier net loss of $49.75 billion, or $30,653 per share.

Last year’s results reflected $55.62 billion of losses on investments and derivatives, as stock markets worldwide plunged.