Berkshire Hathaway's New CEO Deploys Buffett's Cash Hoard
Berkshire Hathaway operating earnings climbed 16% in Q2, while CEO Greg Abel starts to use the company's cash hoard for buybacks and stock purchases. Operating earnings rose to $12.98 billion. Manufacturing, service, and retailing earnings jumped 24% to $4.47 billion. Insurance results were weak, but Warren Buffett's cash hoard saw a significant allocation with Berkshire investing a net $20 billion into stocks and incurring a near $13 billion gain.
Berkshire Hathaway's BRK.B operating earnings climbed 16% to $12.98 billion in the second quarter, up from $11.16 billion a year earlier, as strength in energy, railroads, and manufacturing offset a soft quarter for insurance . Manufacturing, service, and retailing earnings jumped 24% to $4.47 billion, while insurance underwriting profit fell 13% to $1.73 billion and insurance investment income slipped 9% to $3.06 billion.
The quarter marked new CEO Greg Abel's clearest signal yet that he intends to put Warren Buffett's cash hoard to work . Berkshire reversed its recent pattern of net stock selling, becoming a net buyer with nearly $20 billion in equity purchases that produced a roughly $13 billion investment gain, and it repurchased about $4.5 billion of its own shares, its second straight quarter of buybacks under Abel .
The shift suggests Abel is comfortable deploying capital more actively than Buffett did in the run-up to the CEO transition, though the insurance softness is a reminder that Berkshire's core underwriting engine isn't firing on all cylinders. Investors will likely watch whether the pace of equity buying continues into the third quarter and whether insurance underwriting margins recover as pricing normalizes.
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