Berkshire Hathaway Recovered from the Bad Effects of the Pandemic


Berkshire Hathaway, the conglomerate led by Warren E. Buffett, recovered significantly from the dire economic effects of the pandemic in the second quarter, reporting $28.1 billion on Saturday. net earningsrose from $26.3 billion a year ago.

The biggest gains were in rail, utilities and energy jobs, which saw significant declines in 2020 as the pandemic slowed the world economy significantly.

“Continuing in the second half of 2020 and into 2021,” the company said, adding that many of its manufacturing, services and retail businesses “experienced significant improvements in revenues and earnings, in some cases exceeding pre-pandemic levels.”

Berkshire also reported that its own stock repurchases increased from $6.6 billion in the first quarter to just over $6 billion during the quarter.

The holding reported operating income of $6.69 billion through June 30, a 21 percent increase from the same quarter last year. Revenue from the rail business increased 34 percent in the second quarter, reflecting higher freight volumes and increased productivity.

Revenues from the utilities and energy business increased 21 percent from last year, driven by increased revenue from natural gas pipelines.

Real estate brokerage earnings rose $76 million in the second quarter and $150 million in the first half of the year as demand for housing and mortgages increased. Berkshire’s chain of auto dealerships also reported significant earnings growth as auto sales volume increased, up 29.4 percent from 2020.

But Berkshire said its insurance brokerage operating earnings fell to $376 million from $806 million a year ago.

“The policy results of some of our commercial insurance and reinsurance businesses were negatively impacted by estimated losses and costs associated with the Covid-19 pandemic in 2021 and 2020,” the company said, including uncollectible premiums and costs to maintain customer service levels.

Geico’s earnings were also affected. Last year, while policyholders drove far less during pandemic quarantines, the company had far less demand. With the turnaround, he said, demand has increased, falling from $2.06 billion a year earlier to $626 million in the second quarter.

The holding said its manufacturing, services and retail operating income rose to $3 billion from $1.45 billion a year ago.

Retail customer volumes increased due to increased use by customers, favorable weather effects and an increase in average customer numbers.

in the company annual investor meeting In May, Mr. Buffet and Berkshire’s vice president, Charles T. Munger, spoke about the “angry” pace of the economy and how different it was from the beginning of last year.

Berkshire noted that the pandemic could still affect its future outcomes, referring to “the long-term impact of the pandemic on demand for our certain products and services, as well as the ability to vaccinate significant numbers of people in the US and around the world.”


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