Buffett's Berkshire recovering from pandemic, buys back more stock

FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan/File Photo

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc said on Saturday its results are rebounding from the worst effects of the COVID-19 pandemic, and that it has extended its aggressive stock repurchases by buying back $6.6 billion of its own stock.

Operating profit increased 20% to $7.02 billion, or about $4,600 per Class A share, from $5.87 billion a year earlier.

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

First-quarter results last year reflected a $55.62 billion loss on investments and derivatives, as stock markets worldwide plunged.

Accounting rules require Berkshire to report gains and losses on stocks it owns even if it does no buying and selling.

The pandemic caused pain early last year for many of Berkshire’s operating businesses, perhaps none more so than aircraft parts maker Precision Castparts, which in 2020 took a $9.8 billion writedown and shed more than 13,000 jobs.

But Berkshire said many businesses have since experienced recoveries, and posted “considerably higher” earnings and revenue in the first quarter.

The stock repurchases enable Buffett to deploy excess capital when takeovers of whole companies becomes more difficult, reflecting high valuations and the growth of special purpose acquisition companies to take businesses public.

Berkshire repurchased a record $24.7 billion of its own stock in 2020. Despite the latest buybacks, it ended March with $145.4 billion of cash and equivalents.

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