Quarterly earnings rose for the holding company and most of its underlying businesses By Lauren Thomas Updated Aug. 5, 2023 9:25 am ET Shareholders gathered earlier this year for the Berkshire Hathaway annual meeting in Omaha, Neb. PHOTO: REBECCA S. GRATZ/ASSOCIATED PRESS Warren Buffett’s Berkshire Hathaway BRK.B -1.08% swung to a profit in the second quarter, boosted by its insurance division and strong gains in its massive investment portfolio, while its cash pile swelled. The Omaha, Neb., company, which owns businesses including insurer Geico, railroad BNSF Railway and sportswear maker Brooks Running, posted net income of $35.9 billion, or $24,775 a Class A share equivalent. That compared with a loss of $43.8 billion, or $29,754 a Class A share equivalent, a year earlier. Berkshire’s operating earnings, which exclude some investment results, rose slightly to just over $10 billion from $9.3 billion a year earlier. Earnings grew at most of the company’s major units, including its insurance-underwriting operations and insurance-investment-income unit. Buffett has long told the company’s shareholders that they should ignore net income and focus on Berkshire’s operating earnings, which he feels are a better reflection of how Berkshire is doing. Accounting rules require Berkshire to include unrealized gains and losses from its investment portfolio when it reports its net income. Berkshire’s Geico insurance business—which has struggled in the past year due to elevated claims cost—recorded higher average premiums, lower advertising costs and a reduction in prior accident years’ claims estimates, Berkshire said in a securities filing. Berkshire ended the second quarter with $147.4 billion in cash and cash equivalents, compared with around $130 billion at the end of the first quarter. The cash pile mostly contains holdings of short-term U.S. Treasury bills and is nearing record levels. The strong results this quarter came after Berkshire posted a big loss for the same period in 2022 in large part due to investment declines. Last year, stock and bond markets tanked as the Federal Reserve embarked on its most aggressive campaign in decades to raise interest rates. Stocks have risen sharply after last year’s selloff, defying any number of risks along the way. The S&P 500 is up about 17% so far this year, including a 3.1% increase in July that reflected gains across all 11 sectors. Investors in 2023 have brushed off inflation fears, corporate earnings being squeezed, the looming threat of a recession, a standoff over the U.S. debt ceiling and a massive bank failure. Technology stocks have been driving gains, and Berkshire boasts a more than $175 billion stake in Apple, which has run up 40% so far this year. As a result, Berkshire’s Class A shares have been hovering near record highs, bringing the company’s market value to nearly $780 billion. Earlier in the week, Fitch Ratings downgraded the U.S. government’s credit rating weeks after President Biden and congressional Republicans came to the brink of a historic default. But Buffett largely shrugged off the news. “Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month” T-bills, Buffett told CNBC in an interview earlier in the week. Berkshire’s share repurchase activity slowed during the latest quarter. The company said it used about $1.4 billion to buy back stock, compared with $4.4 billion in the first.
You must raise your hat in front of WB! The profit is larger than several countries´GDP! Shit, I was born too late into this game! Make a note: complain to mother + father next time at XMas for not creating me earlier onto this world!
If I were unhappy about my life, I would pick different parents instead of picking a different time to be born?