Check out the companies making headlines in midday trading. General Motors — Shares rose more than 4% after the automaker exceeded analysts’ expectations for its first-quarter results . General Motors posted adjusted earnings of $2.62 per share on revenue of $43.01 billion. Analysts had anticipated earnings of $2.15 per share and revenue of $41.92 billion, according to LSEG. The company also raised its forecast for adjusted automotive free cash flow to between $8.5 billion and $10.5 billion, above its previously anticipated $8 billion to $10 billion. GE Aerospace — The aircraft supplier stock added 7% after reporting first-quarter adjusted earnings of 82 cents per share, higher than consensus estimates of 65 cents a share, per LSEG. GE Aerospace’s revenue of $16.1 billion also exceeded analysts’ expectations of $15.14 billion. PepsiCo — The snack and beverage stock dipped 2% despite a stronger-than-expected first quarter . PepsiCo reported $1.61 in adjusted earnings per share, topping the $1.52 per share expected by analysts, according to LSEG. Even with the first-quarter beat, PepsiCo kept its full-year outlook the same. Novartis — The U.S.-listed shares of the Swiss drugmaker added 2.6% after Novartis raised its full-year guidance. JetBlue Airways — Shares plummeted 16% after the airline company lowered its forecasts for revenue for the second quarter and full-year 2024. JetBlue’s first-quarter revenue came in line with expectations, while it posted a narrower adjusted loss per share than analysts had predicted, according to LSEG. Cleveland-Cliffs — The steel producer tumbled 8.7% after posting a first-quarter earnings and revenue miss. Cleveland-Cliffs posted adjusted earnings of 18 cents per share on revenue of $5.2 billion, while analysts surveyed by LSEG had expected earnings of 22 cents per share on revenue of $5.35 billion. Nucor — Shares moved 7% lower after the steelmaker missed estimates on earnings and revenue for the first quarter. Nucor also said it anticipates lower second-quarter earnings, citing lower average selling prices, which will only be partially offset by modestly increased volumes, within its steel mills segment. Danaher — The life sciences firm popped more than 7% after beating analysts’ expectations for its first-quarter results. Danaher reported adjusted earnings of $1.92 per share on revenue of $5.8 billion. This exceeded the $1.72 per share on revenue of $5.62 billion that analysts had anticipated, according to FactSet. Spotify — The streaming music company surged 16% after easily topping earnings expectations . Spotify reported 97 euro cents per share for the first quarter, compared to the 65 euro cents expected by analysts, according to LSEG. Spotify also beat expectations for quarterly gross margin. Sherwin-Williams — The manufacturer of paints and coatings shed 2% after posting first-quarter adjusted earnings of $2.17 per share, lower than the consensus estimate of $2.22 per share, according to FactSet. Sherwin-Williams’ revenue of $5.37 billion also missed the $5.50 billion analysts had expected. Roblox — Shares added 5.8% after JPMorgan upgraded the gaming platform to an overweight rating . The bank thinks recent investor skepticism, which has contributed to the stock’s roughly 20% year-to-date decline, has now presented a compelling entry point. Sunnova Energy — The solar stock gained 2.8%. KeyBanc Capital Markets downgraded Sunnova Energy to sector weight from overweight, citing caution on residential solar names particularly ahead of first-quarter earnings. Sunnova is already down more than 74% this year. LKQ — The distributor of aftermarket auto parts slid nearly 15% after first-quarter results fell short of analysts’ forecasts. LKQ posted adjusted earnings of 82 cents a share on revenue of $3.7 billion, while analysts called for earnings of 95 cents a share and $3.76 billion in revenue, per FactSet. MSCI — The provider of investment indexes dropped 13% after reporting revenue that missed Wall Street’s estimates. In the first quarter, MSCI posted $680 million in revenue, while analysts polled by FactSet forecast $685.5 million. Earnings came in at $3.52 a share, surpassing expectations by 5 cents. — CNBC’s Michelle Fox, Sarah Min and Jesse Pound 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.