Expansión newspaper – Madrid
Despite the impact of the pandemic on its operating profit and share price, Warren Buffett’s company further increased its share buyback program in the third quarter, nearly doubling the second-quarter record.
The Warren Buffett conglomerate repurchased a record $ 9.2 billion of its own shares (2.5 billion in Class A shares and about 6.7 billion in Class B shares), it revealed in its third-quarter earnings report Saturday. This is well up from the $ 5.1 billion in the second quarter and brings Berkshire’s total buybacks to $ 1 $ 5.7 billion in 2020.
Buffett’s wave of buybacks comes at a difficult time for its operations as the global economy struggles to recover from the impact of Covid, which directly affects the company’s businesses, which include railways, utilities and insurance. Despite a nearly 20% rally in the third quarter of Berkshire Hathaway’s Class A shares, they still underperform the S&P 500 this year. Even after this year’s buybacks, the company’s cash pile is still $ 145.7 billion.
On the other hand, the operating profits of the conglomerate led by the Oracle of Omaha amounted to 5,478 million dollars, 30% less than in the same period of the previous year. In contrast, net profits soared more than 82% and reached 30,137 million. The main culprits for this increase were Apple (whose shares rose more than 26% in the third quarter) and Coca-Cola (with an increase of 10.5%). Mind you, Buffett warned investors not to pay attention to this rally because it’s volatile earnings.
In another vein, it is worth mentioning that the tycoon has made relatively few major moves this year. At the end of August, Buffett announced that Berkshire had acquired stakes of at least 5% in Japan’s major trading companies (Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo) and in November closed its purchase of the natural gas transmission and storage business. Dominion Energy for 8 billion, but has not announced any other major acquisitions this year.