Key facts
- Berkshire Hathaway invested $10 billion in Alphabet, Google's parent company, during the second quarter.
- The company repurchased approximately $4.5 billion of its own stock.
- Berkshire's cash reserves fell to $365.5 billion from nearly $400 billion.
- The conglomerate also added over $21 billion in other stocks to its portfolio.
- Geico experienced a 45% decline in underwriting profits.
- Berkshire's overall profit more than doubled to $25.667 billion, boosted by investment gains.
Berkshire Hathaway, under the leadership of its new CEO Greg Abel, significantly reduced its substantial cash reserves in the second quarter by investing $10 billion in Alphabet, the parent company of Google, and repurchasing approximately $4.5 billion of its own shares. The conglomerate's cash pile shrunk to $365.5 billion from nearly $400 billion at the end of March.
In addition to the Alphabet investment, Berkshire also added more than $21 billion worth of commercial, industrial, and other stocks to its portfolio, though these specific holdings will be disclosed later. The company also completed a $6.8 billion acquisition of homebuilder Taylor Morrison, which closed in July and is not reflected in the quarterly figures.
Berkshire's overall profit more than doubled to $25.667 billion, or $17,868.44 per Class A share, largely due to a significant paper gain in its investment portfolio. However, the company's operating earnings, which exclude investments, grew to $12.983 billion, or $9,038.30 per A share, from $11.16 billion a year earlier.
Concerns were raised regarding Geico's performance, as its underwriting profits fell by 45%. Despite this, analyst Cathy Seifert noted that investors should be encouraged by the scale of the share repurchases, which had not been undertaken at this magnitude for several years, and the 10% operating revenue growth. The company had previously resumed share buybacks in March after a two-year hiatus, but the first quarter saw only about $234 million in repurchases.