Berkshire said Precision, which also makes industrial parts, saw revenue fall by one-third and plans an "aggressive restructuring" to shrink operations. And the company recorded a pre-tax loss of $78 million last quarter, compared to a $481 million profit during the same period of 2019.Precision Castparts took a $250 million charge last quarter to cover restructuring costs and write down the value of inventory and fixed assets. Precision Castparts had been struggling even before the pandemic hit due to unspecified production problems, and its revenue had grown little since the Portland company’s 2016 sale. Precision Castparts Rajshi Industries Supreme Metals FSE Foundry Castwel Foundries MRT Castings. Berkshire Hathaway, Warren Buffett’s investment firm, In its quarterly report issued Saturday, and a detailed regulatory filing Monday, Berkshire Hathaway said that it wrote down the value of Precision Castparts (PCC) by $9.8 billion.“The COVID-19 pandemic produced material declines in commercial air travel during the second quarter,” Berkshire Hathaway wrote. Precision Castparts eliminates 10,000 jobs as aerospace work collapsesOregonLive That followed a $49.75 billion first-quarter loss.An accounting rule requires Berkshire to report unrealized stock gains and losses with net results, causing huge swings that Buffett considers meaningless.Second-quarter operating profit fell to $5.53 billion, or about $3,463 per Class A share, from $6.14 billion, or $3,757 per share, a year earlier.Revenue fell 11% to $56.8 billion, despite gains in some businesses including Duracell batteries, which rose 16%.Geico’s pretax underwriting profit increased fivefold to $2.06 billion because people drove less, resulting in significantly fewer accident claims.But Berkshire said Geico could suffer underwriting losses for the rest of the year, as it awards drivers $2.5 billion of credits on auto and motorcycle policy renewals.Berkshire ended June with a record $146.6 billion of cash and equivalents, and bought just $797 million of equities in the quarter.Buffett has since deployed some cash, agreeing to buy some Dominion Energy gas assets for $4 billion and adding more than $2 billion of Bank of America Corp stock. Precision Castparts Corp. is an American industrial goods and metal fabrication company that manufactures investment castings, forged components, and airfoil castings for use in the aerospace, industrial gas turbine, and defense industries.In 2009 it ranked 362nd on the Fortune 500 list, and 11th in the aerospace and defense industry. The Covid-19 Impact on Global Aerospace High Performance Alloys is estimated at US$ XX million in 2019 and will reach US$ YY million by the end of 2025, growing at compound annual growth rate of ZZ% during 2019-2025. “It’s a recognition of what the market has long believed, that the purchase price was rich, and the integration not as smooth as many would have hoped.”Berkshire, which paid $32.1 billion for Precision in 2016 in its largest acquisition, and which Buffett at the time called a steep price, said COVID-19 caused airlines to slash plane orders, significantly curbing demand for Precision’s products.Buffett himself soured on airlines during the quarter, selling $6 billion of their stock and telling shareholders on May 2 the industry’s future had become “much less clear to me.”Berkshire said Precision, which also makes industrial parts, saw revenue fall by one-third and plans an “aggressive restructuring” to shrink operations. Warren Buffet's Berkshire Hathaway Inc. took a $9.8-billion writedown on its Precision Castparts Inc. holding, an aerospace components manufacturer that Berkshire bought for $32.1 billion in 2016. Berkshire, which acquired Precision for $32.1 billion in 2016 in its lar… (Reuters) – Berkshire Hathaway Inc on Saturday announced a $9.8 billion writedown and 10,000 job losses at its Precision Castparts aircraft parts unit, as the coronavirus pandemic caused widespread pain at Warren Buffett’s conglomerate.Despite the writedown, Berkshire said second-quarter net income surged 87% because of gains in stock investments such as Apple Inc as markets rebounded.Operating profit fell 10%, cushioned by a temporary bump at the Geico auto insurer, as the pandemic caused “relatively minor to severe” damage to most of Berkshire’s more than 90 operating businesses.“The writedown was prudent,” said Cathy Seifert, an equity analyst at CFRA Research. “Airlines responded by reducing and/or cancelling aircraft orders, which is resulting in significant reductions in build rates by aircraft manufacturers and significant inventory reduction initiatives being implemented by PCC’s customers.”The writedown is an acknowledgement that Berkshire Hathaway paid too much for the Portland company, and that Precision Castparts has not been operating well under the new ownership, CFRA research analyst Cathy Seifert “It’s a recognition of what the market has long believed,” she said, “that the purchase price was rich, and the integration not as smooth as many would have hoped.”Boeing’s sustained troubles with the 737 MAX, which have grounded those aircraft for more than a year, further damaged Precision Castparts’ performance last quarter, according to Berkshire Hathaway.Precision Castparts’ revenues fell by one-third in the second quarter, to $1.8 billion. Precision ended 2019 with 33,417 employees, and has shed 30% of its workforce.During the quarter, Buffett, who turns 90 on Aug. 30, also took advantage of Berkshire’s underperforming shares by repurchasing $5.1 billion of stock, even as the pandemic reduced other companies’ ability to buy back their own shares.Berkshire’s stock has significantly underperformed broader markets since the end of 2018, and Seifert said investors should welcome the buybacks.“Berkshire tends to go against the grain, and when so many companies suspended buybacks, Berkshire did the opposite,” she said. Berkshire takes big writedown for Precision Castparts, operating profit falls Warren Buffett's Berkshire Hathaway Inc said on Saturday its quarterly operating profit fell 10%, and it took a big writedown for its Precision Castparts Corp unit, which has had struggles during the coronavirus pandemic.
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