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Berkshire Hathaway's Profit Up By 87% Amid Business Slowdown

BRK-A)(NYSE: BRK-B) released its second-quarter earnings on Saturday morning and its profit margins were up by 87% from last year. It’s a great turnaround for the company, which reported a huge first-quarter loss.

The rise in profit margin can be attributed to the increased value of its investment portfolio in the stock market. However, it also took a $9.8 billion write-down on the aircraft manufacturing business due to the economic impact of COVID-19.

The total earnings of the company are reported to be $26.3 billion, or $16,314 per Class A share, during the second quarter. That’s up from $14.1 billion, or $8,608 per share, a year ago.

Profits increased within company’s insurance divisions while railroad, utilities and other divisions suffered. In the first quarter, the company suffered a loss of $50 billion. The earnings from this quarter seem to be a positive indicator as there are seismic changes that are still being noticed in consumer behaviour.

View more earnings on BRK-A” data-reactid=”27″>View more earnings on BRK-A

The company also reduced the value of its Precision Castparts Corp by $9.8 billion due to the challenges faced by the company during the pandemic.

“The COVID-19 pandemic events will continue to evolve and the effects on our businesses may differ from what we currently estimate,” the company wrote in the report.

The operating profit of the company fell by 10%. Berkshire was reportedly holding $147 billion cash and short-term investments in the second quarter, of which $5.1 billion was used by Warren Buffett to repurchase Berkshire shares.

Fortune Live Media, Flickr” data-reactid=”31″>Image credit: Fortune Live Media, Flickr

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