Berkshire lowers cash stake as buybacks accelerate, reports higher profit

Berkshire Hathaway is decreasing its cash reserves while ramping up stock purchases and reporting stronger earnings for the second quarter. The conglomerate announced that it sold $4.5 billion worth of its own shares in the second quarter, with an additional $3.3 billion repurchased in July, signifying an increased pace of buybacks that had resumed in March after a two-year break.

Moreover, Berkshire bought nearly $20 billion worth of other stocks during the April-June period, marking 14 consecutive quarters of net stock purchases. Notably, Berkshire added $10 billion to its substantial investment in Alphabet, which now ranks among its top holdings. The company's cash holdings ended June at $364.7 billion, a decline from the previous record of $380.2 billion.

Earnings for the second quarter rose by 16%, reaching $12.98 billion, or approximately $9,068 per Class A share, up from $11.16 billion in the same period last year. This growth was driven by improved performance at BNSF Railroad, as well as manufacturing, service, and retail operations, along with favorable foreign currency changes.

Net income surged more than double to $25.67 billion, or roughly $17,928 per Class A share, from $12.37 billion a year earlier. Greg Abel, who assumed the role of CEO following Warren Buffett's chairmanship, has been scrutinized for his approach to managing Berkshire's financial resources. The company's stock repurchase pace closely mirrors Buffett's peak activity during the early stages of this decade, with Berkshire's largest buyback period occurring in 2021, when it repurchased $27 billion of stock.