Warren Buffett's Berkshire Hathaway has reduced its holdings in DaVita, a leading provider of dialysis services, as part of a preplanned share repurchase agreement. On Tuesday, the conglomerate sold 203,091 shares to align with its strategy to maintain DaVita's ownership at 45% on a quarterly basis. This transaction, valued at nearly $6.4 billion, comes amidst a period of financial adjustments and strategic recalibrations for DaVita.
Berkshire Hathaway first invested in DaVita in 2011, and by the end of September, it had become the conglomerate's 10th largest equity holding. Despite an impressive fourth-quarter performance, with earnings per share of $2.24 surpassing analysts' estimates of $2.13 per LSEG, DaVita faced significant challenges. The company incurred $24.2 million in charges related to the closures of its U.S. dialysis centers during the fourth quarter.
The strategic sale by Berkshire is part of a broader agreement reached in April, where DaVita agreed to buy back shares to reduce Berkshire's substantial ownership stake. While this move aligns with DaVita's goals to manage its share distribution, it also signals broader market reactions. Following the sale announcement and a weaker-than-expected outlook for 2025, DaVita's shares fell more than 12% on Friday.
Looking ahead, DaVita projects its adjusted profit per share for 2025 to range between $10.20 and $11.30. This forecast is slightly below analysts' average expectation of $11.24 per share, according to LSEG. The company's outlook appears cautious amid rising care costs that continue to challenge the healthcare sector.
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