Berkshire Hathaway Q2 Earnings Show Resilience Amid Market Uncertainty

BRK.B reported second-quarter operating earnings of $12.98 billion, up from $11.16 billion a year earlier, in the first full quarter of results that reflect chief executive Greg Abel's capital allocation rather than Warren Buffett's.

The balance-sheet movement is the more consequential disclosure. Cash and equivalents fell to $365.5 billion at June 30 from a record $397.4 billion at the end of the first quarter, as Abel spent roughly $4.5 billion on buybacks against just $235 million in the first quarter and put nearly $20 billion to work as net equity purchases, ending a run of fourteen consecutive quarters in which Berkshire sold more stock than it bought. The single largest identified addition was an approximately $10 billion position in Alphabet. Deploying at these index levels is a deliberate signal from a manager who spent three years declining to.

Insurance was the weak side of the quarter. Overall underwriting earnings fell 13% to $1.73 billion, with GEICO underwriting profit down 45%, the kind of margin normalization that follows a period of unusually benign loss experience and pricing that outran claims inflation. Operating strength elsewhere in the portfolio absorbed it.

The setup for the rest of the year is straightforward to monitor: whether buyback pace holds now that Abel has demonstrated willingness, whether the equity purchases continue at $20 billion a quarter, and whether GEICO's underwriting margin stabilizes or keeps compressing.

Related Stocks

• BRK.B
• GOOGL