Warren Buffett’s profit almost wiped out on Axalta as shares slump
New York/ Houston: Warren Buffett’s profits from a 2015 investment in Axalta Coating Systems Ltd have been fading.
Axalta, the maker of paint for autos, plunged 7.9% on Thursday in New York to $29.25. That compares with the $28 price that Buffett’s Berkshire Hathaway agreed to pay two years ago for 20 million shares, for a total of $560 million.
His Omaha, Nebraska-based company acquired the stock from affiliates of Carlyle Group LP.
Axalta posted a June quarter net loss of $20.8 million, driven by a write down of assets in Venezuela. Operating profit of 31 cents a share missed by 8 cents the average estimate of 17 analysts surveyed by Bloomberg.
The biggest surprise in the quarter was a drop in prices for paints used to refinish autos in North America, Ghansham Panjabi, an analyst at R.W. Baird & Co, said in a note.
Companywide, prices fell an average of 2.4%, Axalta said in a presentation.
Higher raw material costs also contributed to narrower margins, the company said.
Berkshire was the largest investor in the coatings company as of 31 December, with a stake of more than 9%, according to a filing from Philadelphia-based Axalta.
Buffett didn’t respond to a request for comment left with an assistant. A spokesman for Axalta didn’t immediately return a message.
Before Thursday, the last time Axalta closed for less than $30 was in March. Bloomberg