Afternoon Roundup: Today's Top Stories
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In the latest sign that companies have more cash than what they know what to do with, Warren Buffett, CEO of Berkshire-Hathaway (NYS: BRK.A) , announced intentions to buy back shares of his own company. The authorization is estimated to be in the tens of billions of dollars. Buffett has been known to criticize share buybacks, saying that only when the stock is cheap enough is a buyback beneficial for shareholders. Buffett, who owns one-third of the voting stock in the company, refused to elaborate on the move, saying that it spoke for itself. After the announcement, Berkshire's stock rose 8% on Monday, but it's still down 10% year-to-date. Buffett said he's still looking for major acquisitions after closing the $9 billion deal to buy Lubrizol, although the company continues to hoard cash. As of June 30, it held $47.9 billion. Read more at The Wall Street Journal.
After 12 years as a public company, Goldman Sachs (NYS: GS) has reported losses in only one quarter, back in 2008. But history may repeat itself in the current quarter as the bank feels the pressure of a slumping economy. Over the summer, the bank said it planned to cut costs by $1.2 billion by mid-2012, which would require eliminating 1,000 jobs, or 3% of its workforce. Now, with the quarter closing on Friday, Goldman has revised its cost-cutting plan. An additional $250 million in cutbacks -- for a total of $1.45 billion -- is likely to mean not just job eliminations but also cuts in salaries and non-compensation expenses like real estate and travel. Executives said no final decision on the numbers has been made and that the amount could quickly change depending on the market. Goldman Sachs is expected to make $1.35 a share for this quarter, nearly half of what it made in 2010. Read more at Dealbook.
The largest U.S. drugstore chain, Walgreen (NYS: WAG) , announced that its net income jumped 69% for the quarter ended Aug. 31, from $470 million to $792 million, aided by the sale of Walgreen's Health Initiatives. But the company may soon see its profits fall as it failed to renew a contract to provide prescriptions for Express Scripts' (NAS: ESRX) customers. Chief Financial Officer Wade Miquelon said losing 75% of sales through Express Scripts would lower profits by $0.21 per share for the year. The contract is set to expire by the end of the year. Express Scripts manages drug benefits for corporations, unions, and other employees. After the announcement, Walgreen shares were down 6% in late trading. Read more at Bloomberg.
Talk between the United Auto Workers and Ford (NYS: F) and General Motors (NYS: GM) are nearing conclusion. Teams of negotiators have been meeting with Ford, the only U.S. automaker to avoid bankruptcy in 2008, for the past two months. The union focused on Ford a day after extending the deal with Fiat SpA-controlled automaker Chrysler. Financial agreements are usually reached on the last days of negotiations.
Meanwhile, UAW-represented workers began voting on the agreed contract between the union and General Motors, for a tentative four-year agreement reached a week ago. Union officials hope to wrap up voting by Thursday, with early results showing support for the deal. As of Tuesday morning, 15 union locals had voted to ratify the contract, with three voting against. Read more at Reuters.
So there you have it -- the top financial stories for this afternoon. If you're interested in getting all the news and commentary on these stocks sign up for My Watchlist -- it's free!
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At the time this article was published Michelle Zayed doesn't own any stocks mentioned.The Motley Fool owns shares of Ford.Motley Fool newsletter serviceshave recommended buying shares of Ford and General Motors. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.