Buffett loses about $700M on IBM

Warren Buffett doesn’t have many bad days, but he really ought to consider going on vacation whenever IBM reports earnings.

The company’s shares fell $8.96 at Tuesday’s open after a mixed earnings report, costing the Oracle of Omaha some $712.9 million.

His conglomerate Berkshire Hathaway owned 79.57 million shares of IBM as of March 31, according to the most recently available filings, making it one of his largest investments.

He is also IBM’s largest shareholder, with almost 20 million more shares than the next-biggest investor.

To be sure, Buffett takes a very long view, and he added to his IBM holdings earlier this year. As recently as May, he said he expected to make “considerable” money on IBM over the long term.

But it’s also not the first time IBM has cost Berkshire a lot of money on a bad quarter.

Last October, IBM’s sharp drop after earnings wiped just over $1 billion off Berkshire’s books.

On Monday, IBM posted second-quarter adjusted profit of $3.84 per share on $20.81 billion in sales. Those were both down 13 percent from the prior-year period.

IBM’s crucial “strategic imperatives”—made up of cloud computing and analytics—saw revenue growth of about 20 percent. That wasn’t enough to ease Wall Street’s skepticism, though.

“I think the challenge for the company is can they grow these strategic imperatives faster than the rest of the company is declining,” said David Nelson, chief strategist at Belpointe Asset Management, in an interview Monday with CNBC’s “Closing Bell.”

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