Warren Buffett’s profit almost wiped out on Axalta as shares slump
Axalta plunged 7.9% 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
Warren Buffett’s 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. Photo: Bloomberg
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
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