Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

BERKSHIRE HATHAWAY INC.

(BRK.A)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Berkshire Hathaway : S&P may cut Buffett's Berkshire due to cash in Precision deal

08/11/2015 | 05:59pm EST
Berkshire Hathaway CEO Warren Buffett talks to reporters prior to the Berkshire annual meeting in Omaha

(Reuters) - Standard & Poor's on Tuesday said it may downgrade Warren Buffett's Berkshire Hathaway Inc (>> Berkshire Hathaway Inc.) because the company plans to spend a large amount of its cash to finance its roughly $32.3 billion purchase of aerospace parts maker Precision Castparts Corp (>> Precision Castparts Corp.).

(Reuters) - Standard & Poor's on Tuesday said it may downgrade Warren Buffett's Berkshire Hathaway Inc (>> Berkshire Hathaway Inc.) because the company plans to spend a large amount of its cash to finance its roughly $32.3 billion purchase of aerospace parts maker Precision Castparts Corp (>> Precision Castparts Corp.).

Berkshire has a "AA" credit rating from S&P, the third highest grade.

S&P analyst Laline Carvalho wrote that the agency may lower the rating by one or two notches within 90 days because of "uncertainty around the funding of the acquisition," and its impact on cash resources and leverage at the parent company.

She also said the review reflects Berkshire's "likely" need to draw on capital from its insurance units to fund the purchase, despite "substantial" cash resources.

An assistant for Buffett did not immediately respond to requests for comment.

A two-notch downgrade would reduce Berkshire's rating to "A-plus," a medium investment grade. S&P could also affirm Berkshire's rating.

Any downgrade may raise the Omaha, Nebraska-based company's borrowing costs. S&P also said it may cut the "AA-plus" financial strength ratings for Berkshire's core insurance units.

Buffett told CNBC television on Monday that he plans to use about $23 billion of Berkshire's $66.6 billion cash hoard to buy Precision Castparts, and borrow the rest.

The merger values Precision Castparts at $37.2 billion including assumed debt, and is Berkshire's largest-ever purchase. It is expected to close in the first quarter of 2016.

Last Friday, Berkshire said its insurance units had $85.1 billion of "float," or the amount of premiums held before claims are paid, as of June 30. Berkshire uses float to help fund acquisitions and other investments.

Earlier on Tuesday, Moody's Investors Service affirmed Berkshire's "Aa2" rating, equal to S&P's "AA" rating, with a stable outlook.

Fitch Ratings on Monday affirmed Berkshire's "AA-minus" rating, its fourth highest grade, with a stable outlook.

In Tuesday trading, Berkshire's Class A shares closed down $800 at $214,500 and its Class B shares fell 62 cents to $142.80. S&P announced its action after U.S. markets closed.

(Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)

By Jonathan Stempel

Stocks treated in this article : Berkshire Hathaway Inc., Precision Castparts Corp.

ę Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
BERKSHIRE HATHAWAY INC. -1.27% 427832.75 Delayed Quote.23.01%
All news about BERKSHIRE HATHAWAY INC.
11/17Paytm's Sharma goes from 'ineligible' bachelor to billionaire
RE
11/16Berkshire Hathaway Dumps Merck, Increases Holdings of Chevron
MT
11/16GLOBAL MARKETS LIVE : Prosus, Facebook, Givaudan, Walmart, Home Depot...
11/16Today on Wall Street: It’s all so quiet
11/16India's Akasa Air orders 72 Boeing 737 MAX jets
RE
11/16AN UNKNOWN BUYER ACQUIRED 35% STAKE : Brk.a).
CI
11/15Buffett's firm trims drugmaker stakes, buys 2 new stocks
AQ
11/15WARREN BUFFETT : Buffett's Berkshire cuts U.S. drugmaker stakes, invests in drug royalty c..
RE
11/15Royalty Pharma, Floor & Decor Shares Climb as Berkshire Hathaway Buys Stakes
DJ
11/15Berkshire Hathaway Discloses Holdings as of Quarter-End
DJ
More news
Analyst Recommendations on BERKSHIRE HATHAWAY INC.
More recommendations
Financials (USD)
Sales 2021 295 B - -
Net income 2021 55 341 M - -
Net cash 2021 2 963 M - -
P/E ratio 2021 11,7x
Yield 2021 -
Capitalization 634 B 634 B -
EV / Sales 2021 2,14x
EV / Sales 2022 2,13x
Nbr of Employees 360 000
Free-Float 73,9%
Chart BERKSHIRE HATHAWAY INC.
Duration : Period :
Berkshire Hathaway Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BERKSHIRE HATHAWAY INC.
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 3
Last Close Price 427 832,75 $
Average target price 495 217,33 $
Spread / Average Target 15,8%
EPS Revisions
Managers and Directors
Warren Edward Buffett Chairman & Chief Executive Officer
Marc D. Hamburg Chief Financial Officer, Secretary & Senior VP
David Sanford Gottesman Independent Director
Walter Scott Independent Director
Charlotte M. Guyman Independent Director
Sector and Competitors
1st jan.Capi. (M$)
BERKSHIRE HATHAWAY INC.23.01%634 231
HONEYWELL INTERNATIONAL INC.-2.11%143 337
SIEMENS AG23.59%131 199
GENERAL ELECTRIC COMPANY13.24%107 442
3M COMPANY0.42%101 144
ILLINOIS TOOL WORKS INC.15.14%73 684