Berkshire Hathaway profit doubles, fueled by a near $13 billion investment gain

In Berkshire Hathaway's latest financial report, new CEO Greg Abel utilized a substantial portion of the conglomerate's cash reserves, investing $10 billion in Alphabet and repurchasing approximately $4.5 billion worth of shares. Following Berkshire's second-quarter earnings announcement, the company's cash holdings decreased to $365.5 billion from nearly $400 billion at the end of March.

While Berkshire disclosed adding over $24 billion worth of various stocks to its portfolio, specific details of these acquisitions were not revealed until a separate filing later in the month. Abel, who assumed the CEO role in January after Warren Buffett's retirement, had previously announced a resumption of share buybacks after more than two years.

However, the company's modest repurchase of $234 million in the first quarter did not meet investor expectations. The more substantial second-quarter purchases indicated Berkshire's commitment to buybacks, though they were still below the anticipated range of $5 billion to $11 billion. The standard for purchases is that shares must be sold below their intrinsic value, a decision made by Abel and Buffett, who do not follow a predetermined spend amount.

Most of the recent repurchases occurred in June, and the current stock price may be influencing the frequency of purchases, as it reached a 52-week high on Thursday. Berkshire had previously acquired Taylor Morrison, a homebuilder, for $6.8 billion in July 2024, though this acquisition was not reflected in the current quarter's figures.

In addition to Alphabet, Berkshire completed a $25.667 billion profit, or $17,868.44 per Class A share, doubling its bottom line and showcasing a significant paper gain in the value of its investments. Operating earnings grew to $12.983 billion, or $9,038.30 per Class A share, from $11.16 billion, or $7,759.58 per Class A share.

Berkshire's diverse portfolio includes major insurers like Geico, utilities, BNSF Railway, and various manufacturing and retail companies such as Precision Castparts and See's Candy.