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MarketScreener Homepage  >  Equities  >  Nyse  >  Berkshire Hathaway Inc.    BRK.A

BERKSHIRE HATHAWAY INC.

(BRK.A)
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Real-time Estimate Quote. Real-time Estimate Cboe BZX - 12/01 01:31:14 pm
343129.295 USD   -0.16%
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AmEx issues dismal outlook on business travel spending as profit slumps

10/23/2020 | 11:41pm EST
FILE PHOTO: An office building with American Express logo is seen in Sydney

(Reuters) - American Express Co on Friday warned that business travel spending would not pick up before early 2022 after reporting underwhelming third-quarter profit due to weak spending on travel and entertainment by its card users.

In what appears to be a shift in strategy, the New York-based credit card issuer also walked back on its cost-cutting target of nearly $1 billion in 2020 and instead decided to spend heavily to add new card customers.

"We have begun to selectively spend in areas critical to rebuilding growth momentum ... we expect our Q2 through Q4 year-over-year OpEx declines will be somewhat less than the $1 billion we initially discussed back in April, which ... was at the moment of peak uncertainty about the future," Chief Financial Officer Jeff Campbell said in a post-earnings conference call with analysts.

Credit card companies have been hit hard as the pandemic-induced recession forces companies to lay off workers and consumers to stay at home.

Spending on AmEx cards fell 19% to $248.7 billion in the quarter, with travel and entertainment related spending sliding 69% from a year earlier.

"We're all consistent in terms of how we feel about business travel, which is probably not going to (pick up) till late 2021, early 2022," Chief Executive Officer Stephen Squeri said on the call with analysts.

AmEx, which has tie-ups with large airlines and hotels and whose largest shareholder is Warren Buffett's Berkshire Hathaway Inc, set aside $665 million in loss provisions during the quarter.

However, that was less than it set aside last quarter, as the outlook for potential defaults improved, with AmEx saying overall spending volumes had shown a "steady recovery" since the lows of mid-April.

Online consumer retail spending was a bright spot for the card issuer during the quarter, clocking a 32% jump over last year.

Non-travel and entertainment spending, which includes online and offline retail spending, inched up 1% from a year ago after adjusting for cross-currency fluctuations.

Quarterly profit fell 40% to $1.07 billion, or $1.30 per share, missing analysts' average estimate of $1.35 per share, according to Refinitiv data, hurt mainly by higher-than-expected expenses.

Total revenue, excluding interest expense, fell 20% to $8.8 billion, but came in ahead of muted expectations.

AmEx shares, which have lost about 16% of their value so far this year, closed down nearly 4% on Friday.

(Reporting by Niket Nishant in Bengaluru; Writing by Noor Zainab Hussain; Editing by Shailesh Kuber, Arun Koyyur amd Daniel Wallis)

By Niket Nishant


© Reuters 2020
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Financials (USD)
Sales 2020 248 B - -
Net income 2020 15 275 M - -
Net cash 2020 13 217 M - -
P/E ratio 2020 35,5x
Yield 2020 -
Capitalization 537 B 537 B -
EV / Sales 2020 2,11x
EV / Sales 2021 1,95x
Nbr of Employees 391 500
Free-Float 77,8%
Chart BERKSHIRE HATHAWAY INC.
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Berkshire Hathaway Inc. Technical Analysis Chart | MarketScreener
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Technical analysis trends BERKSHIRE HATHAWAY INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 3
Average target price 365 000,00 $
Last Close Price 343 688,00 $
Spread / Highest target 10,6%
Spread / Average Target 6,20%
Spread / Lowest Target 1,84%
EPS Revisions
Managers
NameTitle
Warren Edward Buffett Chairman & Chief Executive Officer
Marc D. Hamburg Chief Financial Officer & Senior Vice President
Charles Thomas Munger Vice Chairman
David Sanford Gottesman Independent Director
Walter Scott Independent Director
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