Profit Jumps 82% At Buffett's Firm But Virus Hurts Business

OMAHA, Neb.: Warren Buffett’s conglomerate reported an 82% jump in its third-quarter profit as the value of its investment portfolio soared, but Berkshire Hathaway said the coronavirus pandemic continued to hurt its assorted businesses, such as BNSF railroad.

Berkshire said Saturday that it earned $30.1 billion, or $18,994 per Class A share, during the quarter. That’s up from $16.5 billion, or $10,119 per Class A share, a year ago. Most of the gains were due to a $24.8 billion improvement in the estimated value of Berkshire’s investments, which include large stakes in Apple and Bank of America.

Buffett maintains that Berkshires operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. By that measure, Berkshires operating earnings declined by 32%, to $5.49 billion, or $3,452.45 per Class A share. That’s down from $8.07 billion, or $4,943.04 per Class A share, a year earlier.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $3,587.63.

Berkshire said it spent $9 billion repurchasing its own shares during the third quarter, which is nearly double the record $5.1 billion it spent buying its own stock in the second quarter. But even after the repurchases and a handful of investments Berkshire made during the quarter, the company still held $145.7 billion in cash and short-term investments at the end of the third quarter.

Berkshire said its revenue slipped by 3% in the quarter, to $63.02 billion.

BNSF said profit fell by 8%, to $1.35 billion, at the railroad as the coronavirus continued to slow freight traffic. Berkshire said the railroad delivered 8% less freight during the quarter, which is better than the second quarter, when volume fell by 18% at the height of the virus-related business shutdowns, but still significantly lower than last year.

Berkshire owns more than 90 companies, including Geico insurance and utility, furniture, manufacturing and jewelry businesses. The Omaha, Nebraska-based conglomerate also has major investments in such companies as American Express, Moody’s and Coca-Cola.

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