Berkshire Hathaway reported operating earnings of $12.98 billion for the second quarter, up from $11.16 billion in the prior-year period, reflecting a 16% increase. The results demonstrated strength in several business segments, with manufacturing, service and retailing earnings climbing 24% to $4.47 billion and Berkshire Hathaway Energy’s profit surging 27% to $891 million. The railroad division BNSF also contributed with a 6% earnings increase to $1.56 billion.
The insurance segment presented a challenging area for the quarter. Underwriting earnings declined 13% to $1.73 billion from $1.99 billion a year earlier, while insurance investment income fell 9% to $3.06 billion, indicating headwinds in this traditionally important business line.
Under CEO Greg Abel, 64, who assumed leadership at the start of the year, the conglomerate initiated a more active deployment strategy for its substantial capital reserves. Berkshire repurchased approximately $4.5 billion of its own shares during the quarter, a significant acceleration from the $235 million spent on buybacks in the first quarter. The company’s cash position declined to $365.5 billion at the end of June from a record $397.4 billion three months prior, reflecting capital deployment efforts including the closing of the Taylor Morrison acquisition.
In a notable shift in investment approach, Berkshire became a net buyer of equities during the period with nearly $20 billion in net purchases, reversing a pattern of equity sales that had continued for 14 consecutive quarters. The filing revealed that Alphabet now ranks among the company’s five largest equity holdings alongside American Express, Apple, Bank of America and Coca-Cola, following a $10 billion Alphabet investment disclosed earlier in the year.
Berkshire shares had advanced 3% on the year at the time of the earnings announcement, trailing the S&P 500′s 13% gain, though the stock had gained 9% over the preceding three months.
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