Key Takeaways:
Berkshire Hathaway reported Q2 operating earnings of $12.98 billion, up 16% from a year earlier, as manufacturing and energy units strengthened.
The results mark Greg Abel's second quarter as chief executive, a transition that former CEO Warren Buffett has publicly endorsed. "Greg did that faster than I could [have] done it, smoother than I could have done it, and I never talked to the CEO. He has launched," Buffett told CNBC of Abel's $6.8 billion deal to buy homebuilder Taylor Morrison.
Operating earnings of $12.98 billion, or about $6.03 per Class B share, beat the $5.04 consensus. Net earnings attributable to shareholders more than doubled to $25.67 billion, or $11.91 per Class B share, from $12.37 billion a year earlier, helped by $12.68 billion in investment gains. Manufacturing, service and retailing, the largest segment, generated $4.47 billion, up from $3.60 billion. BNSF railroad earned $1.56 billion and Berkshire Hathaway Energy $891 million, while insurance underwriting slipped to $1.73 billion from $1.99 billion.
Berkshire repurchased about $4.5 billion of stock in the quarter, bringing the half-year total to $4.8 billion. The company held roughly $397 billion in cash and short-term investments at the end of March, a balance that likely declined after the Taylor Morrison deal closed in the second quarter. Insurance float rose about $1.1 billion to $177.5 billion since year-end.
Shares traded near $519 on Friday, down about 1%, after gaining more than 10% since the start of June. The stock has lagged the S&P 500's 20.9% gain over the past year, rising about 9.9%, as Berkshire's limited technology exposure weighed on relative performance. Abel more than doubled the company's stake in Alphabet in the first quarter, a move Buffett said he initiated.
The results show Berkshire's operating engine holding steady under Abel, with buybacks signaling management sees the shares as undervalued. Investors will watch the 10-Q filing and any second-quarter cash deployment for clues on capital allocation, with UBS analysts targeting $585 for Class B shares.
This article is for informational purposes only and does not constitute investment advice.
