Berkshire Hathaway put a dent in its massive cash haul during the second quarter, repurchasing company shares and buying more stocks than it sold for the first time in more than three years.
The Omaha, Neb.-based conglomerate said Saturday its quarterly profit more than doubled, powered by investment gains and strong results from its industrial and retail businesses.
Net income rose to $25.67 billion, or $17,868 per Class A share, from $12.37 billion, or $8,601 per Class A share, a year earlier.
Berkshire ended June with $364.7 billion in cash and Treasury bills after accounting for a payable for purchasing some of the short-term government debt, a 4% decrease from three months earlier. It marked the first time the company's cash declined sequentially in four years.
Berkshire's $6.8 billion purchase of the home builder Taylor Morrison Home and its $10 billion investment in Alphabet shares during the second quarter ranked among the biggest deals the conglomerate has pursued in recent years.
The spending spree is a sign that Greg Abel, who succeeded Warren Buffett as chief executive in January, is beginning to put his stamp on a conglomerate his predecessor ran for more than half a century.
Some Berkshire watchers say that while figuring out how to spend much more of that cash remains a challenge for Abel, they are patient for now.
"It's very hard to want Greg to be making big deals in an ebullient market like now," said Paul Lountzis, president of Lountzis Asset Management, which owns Berkshire shares. "The private markets are insane, and the public markets are kind of silly, too."
Operating earnings, which exclude some investment results, rose 16.3% to $12.98 billion from $11.16 billion. Profit from Berkshire's portfolio of manufacturing, service and retailing businesses -- a group that includes industrial metal components, Duracell batteries and Flying J fuel stations -- jumped 24% to $4.47 billion. The company's insurance arm reported a drop in underwriting earnings, weighed down by results from car insurer Geico, and investment income.
Buffett has said that operating earnings are the better measure of the company's performance. Accounting rules require Berkshire to include unrealized gains and losses from its giant investment portfolio when it reports net income, meaning that short-term fluctuations in the stock market can cause big swings in quarterly income.
The company repurchased 478 Class A shares and more than 8 million Class B shares in May and June, for roughly $4.5 billion.
Berkshire bought $23.5 billion of equity securities during the second quarter and sold $3.7 billion in the same period. Berkshire's largest holdings are Google parent Alphabet, American Express, Apple, Bank of America and Coca-Cola. The company is set to disclose more specifics on its stock portfolio in a regulatory filing next week.
Berkshire's Class A shares closed Friday at $780,086 apiece and are up 3.4% this year. The stock has fallen 3.6% from a record $809,350 reached in early May 2025, right before Buffett announced his retirement.
Comments