DaVita Plunges Over 10% In Friday Pre-Market After Warren Buffett Cuts Stake In One Of Berkshire Hathaway's Longest-Held Investments

The shares of DaVita Inc.DVA plunged 10.2% in pre-market hours trading on Friday after Berkshire Hathaway trimmed its stake in the company. The dialysis provider also issued a weak outlook for 2025 as it announced its results after the market closed on Thursday.

What Happened: Berkshire Hathaway BRK BRK, the multinational conglomerate headed by Warren Buffett, sold off its 45% stake or 203,091 shares in the company. This sale, which took place on February 11, has brought down the conglomerate’s holdings to approximately $6.4 billion, representing about 35.89 million shares.

Additionally, DaVita’s 2025 outlook missed Wall Street expectations, projecting full-year EPS between $10.20 and $11.30, lower than the analysts’ average estimate of $11.44.

SEE ALSO: Trump Administration Reevaluates CHIPS Act Grants, Potentially Delaying Semiconductor Funding: Report

Why It Matters: Even as the company posted a weaker outlook, its fourth-quarter earnings and revenue exceeded expectations. The company reported adjusted earnings per share of $2.24 for Q4, exceeding the analyst consensus of $2.13. Revenue reached $3.3 billion, surpassing estimates of $3.26 billion.

CEO Javier Rodriguez expressed confidence: “Despite a year with unique hurdles, we finished strong in 2024, producing full year adjusted operating income and adjusted EPS in the top half of our guidance range.” DaVita also anticipates supply dynamics to return to normal in the first quarter.

Meanwhile, the sale by Berkshire Hathaway was part of a share repurchase agreement, under which DaVita is committed to buying back enough shares every quarter to keep Berkshire’s stake at 45%. Berkshire Hathaway has been a shareholder in DaVita since the last quarter of 2011, as per Reuters.

DaVita stock closed 2.9% higher at $177.06 on Thursday. It surged more than 43% over the past year.

• READ MORE: Apple, Tesla And Other MAG 7 Peers Too Expensive? Top Hedge Fund Challenges ‘Overvaluation’ Concerns, Says They Are Fairly Priced If They Sustain 20% Earnings Growth Rate

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.