Tags: warren buffett | profit | paint | axalta

Buffett's Profit Almost Wiped Out on Axalta Deal as Shares Slump

Image: Buffett's Profit Almost Wiped Out on Axalta Deal as Shares Slump
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Thursday, 03 Aug 2017 03:12 PM

Warren Buffett’s profits from a 2015 investment in Axalta Coating Systems Ltd. have been fading fast.

Axalta, the maker of paint for autos, plunged as much as 11 percent to $28.18 Thursday in New York, the biggest fall since its 2014 IPO. That compares with the $28 price that Buffett’s Berkshire Hathaway Inc. agreed to pay two years ago for 20 million shares. His Omaha, Nebraska-based company acquired the stock from affiliates of Carlyle Group LP.

Axalta posted a second-quarter net loss of $20.8 million, driven by a writedown 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 percent, 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 Dec. 31, with a stake of more than 9 percent, 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.

Axalta's stock price was down 3.4 percent at $28.41 at 1:19 p.m. in New York, bringing its decline for the year to 4.5 percent.

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Warren Buffett's profits from a 2015 investment in Axalta Coating Systems Ltd. have been fading fast. Axalta, the maker of paint for autos, plunged as much as 11 percent to $28.18 Thursday in New York, the biggest fall since its 2014 IPO.
warren buffett, profit, paint, axalta
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2017-12-03
Thursday, 03 Aug 2017 03:12 PM
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