Precision Castparts probably has become one of the more valuable divisions of Berkshire Hathaway, just six years after Berkshire took a big write-down against the aircraft parts maker.

Precision Castparts, the global leader in making specialized, high-quality parts for aircraft, as well as gas turbines, saw its pretax profits rise 34% in the second quarter on a 14% sales gain to $3.1 billion, continuing a trend of sharply higher profits.

The profit gain was reported in the Berkshire 10-Q for the second quarter released Saturday along with the company's earnings.

Precision Castparts, a beneficiary of the commercial aircraft boom, could be worth $60 billion to $75 billion, Barron's estimates, comfortably above Berkshire's purchase price of $37 billion in 2016.

Berkshire didn't disclose Precision Castparts' absolute earnings in the 10-Q -- a policy that applies to many of the company's units.

Barron's has argued Berkshire should improve its quarterly disclosure and provide profits of all its major units to better inform investors.

Barron's estimates that Precision Castparts is on track to earn about $2.5 billion after taxes this year. Makers of aircraft parts like Woodward, Heico and TransDigm trade for high valuations of 30 to 60 times earnings due to strong growth outlooks in a booming industry.

Barron's went back to 2023, the last year Berkshire disclosed Precision Castparts' actual earnings, and then adjusted the amount for percentage profit gains since then.

Put a multiple of 25 on our estimate of 2026 after-tax profits and Precision Castparts would be worth about $62 billion, and at a P/E of 30 about $75 billion.

That likely would make it the fourth most valuable unit within Berkshire after insurance (worth over $600 billion including investments), the BNSF railroad ($140 billion) and Berkshire Hathaway Energy, the company's utility ($90 billion). These estimates are in line with those of UBS analyst Brian Meredith. Berkshire, the world's biggest conglomerate, has dozens of operating units.

If Precision Castparts has doubled in value since Berkshire bought it, it would amount to a roughly 7% annualized return, good but not great considering the S&P 500 is up almost fourfold in the past decade. The company's revenues are on pace to total $12 billion this year, up only about 20% since 2015, its last year as a public company.

Precision Castparts (PCC) was hurt badly by the aircraft industry downturn during Covid and Berkshire took a nearly $11 billion write-down against the business in 2020.

That prompted then CEO Warren Buffett to comment in his shareholder letter released in early 2021:

"I paid too much for the company. No one misled me in any way -- I was simply too optimistic about PCC's normalized profit potential. Last year, my miscalculation was laid bare by adverse developments throughout the aerospace industry, PCC's most important source of customers."

"In purchasing PCC, Berkshire bought a fine company -- the best in its business," Buffett continued.

It turned out that buying the best company in the industry has paid off -- it just has taken some time.