Check out the companies making headlines in midday trading: New York Community Bank — Shares of the beaten-down regional bank popped more than 31% after CEO Joseph Otting said in a release , “we have a clear path to profitability over the following two years.” The bank on Wednesday posted a quarterly loss of $335 million , fueled by a rise in soured commercial loans and higher expenses. Super Micro Computer — The server vendor dropped 15% after missing revenue expectations for its fiscal third quarter. However, Super Micro beat analysts’ expectations for its adjusted earnings and hiked its revenue guidance for its fiscal 2024 year. Starbucks — Shares plunged more than 16% after the coffee chain posted weaker-than-expected quarterly results on the top and bottom lines. Starbucks posted adjusted earnings of 68 cents per share on revenue of $8.56 billion. It missed analysts’ forecasts of 79 cents per share in earnings and $9.13 billion for revenue, per LSEG. Pfizer — The drugmaker’s shares rose 3% after Pfizer topped Wall Street’s first-quarter revenue forecast and raised its full-year profit guidance. Pfizer now expects adjusted earnings of $2.15 to $2.35 per share for the full year, higher than its previous forecast of $2.05 to $2.25 per share. Skyworks Solutions — TD Cowen downgraded Skyworks to hold from buy, sending the Apple supplier down 15%. The firm said it sees numerous headwinds, and that the stock’s risk/reward ratio skews negative “until there is greater visibility into a Mobile content catalyst.” Amazon — The tech giant added 1.3% on the back of its strong first-quarter profit and revenue beat. Advertising revenue grew 24% in the first quarter, and Amazon Web Services also posted results that surpassed analysts’ expectations. SiriusXM — The broadcasting company’s stock jumped nearly 4% after Goldman Sachs upgraded SiriusXM to neutral from sell mainly on valuation, citing its recent underperformance. CVS Health — Shares plunged 16% following the drugstore chain and pharmacy benefit manager’s first-quarter adjusted earnings and revenue miss. In addition, CVS cut its full-year profit outlook , which also missed the consensus estimate, citing higher medical costs. Powell Industries — The Houston-based electrical infrastructure company advanced 22% after beating Wall Street’s fiscal second-quarter expectations. Powell posted earnings of $2.75 per share on revenue of $255 million. In the year-ago quarter, the company reported 70 cents per share in earnings and revenue of $171.4 million. Estée Lauder — Shares of the beauty and skin care conglomerate dropped 12% on its disappointing guidance for the fiscal fourth quarter. Estée Lauder said it now expects adjusted earnings per share of 19 cents to 29 cents, which was below analysts’ forecast of 76 cents per share, according to LSEG. Kraft Heinz — The ketchup and prepared food maker’s stock tumbled 6.6% on the back of weak first-quarter revenue. Kraft Heinz saw $6.41 billion in the three-month period, slightly less than the $6.43 billion estimate from analysts polled by LSEG. Adjusted earnings were in line with expectations at 69 cents per share. Pinterest — Shares of the social media platform soared 21% after the company surpassed Wall Street top- and bottom-line estimates for the first quarter. Pinterest’s second-quarter revenue guidance also beat expectations, as the company forecast sales of $835 million to $850 million compared to the LSEG consensus estimate of $827 million. Advanced Micro Devices — The chipmaker fell 9.5% after it issued in-line guidance for sales in the second quarter, forecasting sales of about $5.7 billion in the current quarter, or 6% annual growth. Yum Brands — The fast-food giant lost nearly 4% after it reported quarterly adjusted earnings and revenue that missed analysts’ expectations. KFC and Pizza Hut reported same-store sales declines as they struggled to attract customers, while Taco Bell’s same-store sales rose just 1%. 3M — Shares added 2.8% after JPMorgan upgraded shares of the conglomerate to overweight from neutral, enthused by its current trading price and earnings momentum after the company posted a beat on profit estimates driven by improved electronics demand. — CNBC’s Alex Harring, Yun Li, Lisa Kailai Han, Hakyung Kim and Michelle Fox contributed reporting.
OMAHA, Nebraska — Warren Buffett said Saturday his designated successor Greg Abel will have the final say on Berkshire Hathaway’sinvesting decisions when the Oracle of Omaha is no longer at the helm.
“I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting. “If you understand businesses, you’ll understand common stocks.”
Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger inadvertently made the revelation at the shareholder meeting. Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail.
Buffett offered the clearest insight into his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investing icon, who’s turning 94 in August, said his decision is influenced by how much Berkshire’s assets have grown.
“I used to think differently about how that would be handled, but I think that responsibility should be that of the CEO and whatever that CEO decides may be helpful,” Buffett said. “The sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. It just doesn’t work.”
Berkshire’s cash pile ballooned to nearly $189 billion at the end of March, while its gigantic equity portfolio has stocks worth a whopping $362 billion based on current market prices.
“I think what you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things,” Buffett added. “I think the responsibility ought to be entirely with Greg.”
While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio, where Buffett has garnered a huge following by racking up huge returns through investments in the likes of Coca-Cola and Apple.
Berkshire investing managers, Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock portfolio (about 10%) for about the last decade. There was speculation that they may take over that portion of the Berkshire CEO role when he is no longer able.
But it seems, based on Buffett’s latest comments, that Abel will have final decisions on all capital allocation — including stock picks.
“I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move,” Buffett said.
Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s equity portfolio is worth $362 billion. A previous version misstated the figure.
Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”
Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.
Paramount
Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war.
OMAHA, Neb. — Warren Buffett said that Berkshire Hathaway is looking into an investment in Canada.
“We do not feel uncomfortable in any shape or form putting our money into Canada,” he told an arena full of investors Saturday. “In fact, we’re actually looking at one thing now.”
The billionaire investor has placed bets in the country in the past. He’s previously taken a roughly $300 million position in Home Capital Group that investors took as a vote of confidence in the troubled Canadian mortgage underwriter.
The “Oracle of Omaha” said during the annual shareholder meeting that he does not expect to make significant bets outside the U.S., saying his recent investments in Japanese trading houses were a compelling exception. But Buffett noted the similarity in operations between the Canada and the U.S.
“There’s a lot of countries we don’t understand at all,” Buffett said. “So, Canada, it’s terrific when you’ve got a major economy, not the size of the U.S., but a major economy that you feel confident about operating there.”
Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogen | CNBC
Buffett did not reveal the specific company he’s looking at north of the border or whether it was public or private.
“Obviously, there aren’t as many big companies up there as there are in the United States,” Buffett said. “There are things we actually can do fairly well that Canada could benefit from Berkshire’s participation.”
Canada’s S&P/TSX Composite Index is up about 5% this year. The economy has large financial and commodity industries.