New CEO Greg Abel spent $14.5B on Alphabet shares and buybacks in Q2, shrinking Berkshire's cash pile to $365.5B from nearly $400B. Operating earnings rose 16%.
Berkshire Hathaway spent aggressively in the second quarter, deploying roughly $35 billion of its cash hoard on an Alphabet stake and stock repurchases. Cash holdings dropped to $365.5 billion from nearly $400 billion at the end of March, the conglomerate reported Saturday.
The spending marks the most active capital deployment since Greg Abel took over as CEO in January. Berkshire bought $10 billion worth of Alphabet shares and repurchased about $4.5 billion of its own stock. The buyback figure came in below the $5 billion to $11 billion range analysts had expected, based on a filing Buffett made in July when he announced his annual charitable donations.
Most of the repurchases occurred in June, the company said. Whether they continue at the same pace is uncertain. Berkshire shares hit a 52-week high on Thursday. The company only buys back stock when Abel and Buffett believe the price is below intrinsic value. No specific target is set.
Operating earnings, the metric Buffett says gives the clearest picture of the underlying businesses, rose to $12.983 billion, or $9,038.30 per Class A share, from $11.16 billion, or $7,759.58 per share, a year earlier. The 16% gain reflected stronger results across Berkshire's insurance, railroad and utility operations.
Net profit more than doubled to $25.667 billion from $12.37 billion, helped by a large paper gain on its investment portfolio. The year-ago quarter included a $3.8 billion writedown on Berkshire's Kraft Heinz stake.
The quarterly report did not name the other stocks Berkshire bought during the period. That detail will come in a separate 13F filing later this month.
Berkshire owns insurers including Geico, a collection of big utilities, the BNSF railroad, and manufacturers such as Precision Castparts and See's Candy. The company repurchased $78 billion of its own stock between 2018 and 2024.
In addition to the Alphabet investment, Berkshire completed its $6.8 billion acquisition of homebuilder Taylor Morrison in July, so that deal is not reflected in the second-quarter cash figures. Warren Buffett, who led Berkshire for six decades, stepped down as CEO in January but remains chairman.
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