Make 300 million a day! The second quarter financial report of Buffetts company is eye-catching

category:Finance
 Make 300 million a day! The second quarter financial report of Buffetts company is eye-catching


Results show that Berkshires investment income reached $34.5 billion in the second quarter, pushing the groups overall net profit to $26.4 billion from $14.1 billion a year ago.

Since the bottom of the US stock market at the end of March, several heavy positions of Berkshire have performed well. Among them, Apple Rose 44% in the second quarter, and its total market value rose to $91.5 billion in the second quarter, with a floating profit of $27.7 billion. In addition, Amazon surged 36%, bank stocks also led the way, with JPMorgan up 27% over the same period. However, Berkshire sold nearly $13 billion of shares in the last quarter, mainly in aviation companies, which is also the largest reduction in more than 10 years.

Affected by the US economic downturn, Berkshires operating profit fell 10% in the second quarter to $5.51 billion from $6.14 billion in the same period last year. Berkshire has 97 enterprises, most of which have been affected by the epidemic. For example, the traffic volume of BNSF railway decreased, the sales of sees candies and DairyQueen in the food industry declined, and the business of building materials and carpets was also in trouble. The overall profits of manufacturing, service and retail industries fell by 42%.

Berkshire warned that the continued spread of the epidemic has brought uncertainty to its business and could affect the companys future earnings, cash flow and financial position. GEICO, Berkshires insurance giant, is likely to see its underwriting performance negatively affected by the epidemic for the rest of 2020 and the first quarter of next year, the company said.

The scale of buyback reached a new high

In July 2018, Berkshire lifted the restrictions on its own stock repurchase and relaxed the restrictions on its repurchase policy. The previous provision that the repurchase price shall not exceed 1.2 times of the book value per share (BV) was changed to allowing the repurchase at a price lower than the intrinsic value of the company. In this years shareholder letter, Mr. Buffett again mentioned the matter, saying that Berkshire would buy back its shares only if Munger and he believed that Berkshires share price was lower than its value; after Berkshire completed the buyback, the company still had sufficient cash. As for buybacks, Mr. Buffett said he hoped that the number of Berkshires shares would decline over time. If the discount between the share price and intrinsic value was expanded, he would be more active in repurchase, but would not do so to support the share price. At a shareholders meeting in early May, Mr. Buffett said buybacks were not more attractive than before, but the latest data showed a shift in his mind. In the first half of this year, Berkshires shares fell 21%, while the S & P 500 fell 4%. The stock price of Berkshire rose 25% from July to the time of the first financial reporters press release. The class A shares closed at $314333.88 on the 7th, and the S & P 500 index rose 8.1%. Source: Wang Xiaowu, editor in charge of Finance and Economics_ NF

In July 2018, Berkshire lifted the restrictions on its own stock repurchase and relaxed the restrictions on its repurchase policy. The previous provision that the repurchase price shall not exceed 1.2 times of the book value per share (BV) was changed to allowing the repurchase at a price lower than the intrinsic value of the company. In this years shareholder letter, Mr. Buffett again mentioned the matter, saying that Berkshire would buy back its shares only if Munger and he believed that Berkshires share price was lower than its value; after Berkshire completed the buyback, the company still had sufficient cash.

As for buybacks, Mr. Buffett said he hoped that the number of Berkshires shares would decline over time. If the discount between the share price and intrinsic value was expanded, he would be more active in repurchase, but would not do so to support the share price. At a shareholders meeting in early May, Mr. Buffett said buybacks were not more attractive than before, but the latest data showed a shift in his mind.