Warren Buffett’s Berkshire Hathaway Adds to Its Stake in Occidental Petroleum
I am quoted in the Wall Street Journal:
Generally accepted accounting principles recommend that investors include a proportionate share of a company’s earnings in their own results once they own at least 20% of the company’s common stock. With analysts expecting Occidental to report about $10 billion in earnings this year, Berkshire could increase its reported profit by about $2 billion if it winds up acquiring 20% of Occidental’s shares, according to David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business.
That would be a significant lift for Berkshire. At the moment, the company only includes Occidental’s dividend payments—less than $100 million annually—in its earnings, Mr. Kass said. Last year, Berkshire posted a record profit of about $90 billion.
