Warren Buffett’s Berkshire Earnings Rise As Apple Stock Gains; Cash Hoard Swells As Stock Sales Continue

HomeStock-MarketWarren Buffett’s Berkshire Earnings Rise As Apple Stock Gains; Cash Hoard Swells...

SMT warrenbuffett 0804 news

Operating earnings climbed 7% with insurance gains offsetting railroad decline

Omaha, NE — Warren Buffett’s Berkshire Hathaway on Saturday reported higher second quarter earnings, boosted by strong gains in its insurance units and its massive investment in Apple stock. But operating profits for its railroad declined.

The Oracle of Omaha’s conglomerate posted operating earnings of $10.04 billion, up 7% vs. a year earlier. Revenue climbed 21% to $92.5 billion. Analysts expected Berkshire Hathaway earnings to fall 8% to $3.87 a share, with revenue rising nearly 6% to $80.58 billion.

“Our operating businesses generally performed well during the quarter, and the stock market provided a further boost,” said Buffett in a statement.

>>Related  Dow Futures Down, Nvidia Slumps to 20-Year Low

Insurance underwriting profit surged 74% amid lower catastrophe losses while investment income also increased solidly. However, railroad operating profit fell 24% as higher fuel costs ate into profits at BNSF.

The company posted a net profit of $35.91 billion compared to a net loss of $43.62 billion a year ago thanks to unrealized investment gains. Berkshire holds a massive $356 billion equity portfolio with sizable stakes in Apple, Bank of America, Coca-Cola and other blue chips.

Apple stock accounts for nearly 50% of Berkshire’s portfolio. Shares of the tech titan have climbed over 40% in 2022, adding billions in unrealized gains. An unrealized gain of $26 billion in Q2 came primarily from Berkshire’s Apple holdings.

>>Related  5 Hot Stocks Near Buy Points as Markets Eye Fed Meeting

Berkshire’s cash pile grew to a record $147.38 billion, up from $130.62 billion last quarter as Buffett sold nearly $8 billion in stocks. The legendary investor has struggled to find attractive acquisition targets lately, opting to return cash to shareholders through buybacks. Berkshire repurchased just $1.4 billion of its shares in Q2, down from $4.4 billion in Q1.

“I don’t think anybody could manage $100 billion and make it worthwhile,” said Buffett about the cash in a CNBC interview. “My preference would be to have $30 billion, or something like that, and earn a decent return on it.”

>>Related  5 Dividend Growth Stocks to Buy That Will Transform Your Portfolio

With Treasury yields above 5%, Buffett has plowed cash into short-term government securities while trimming stock holdings. Berkshire sold nearly $11 billion in equities in the first half of 2022. But the investor recently expressed confidence in U.S. Treasurys after Fitch downgraded America’s credit rating.

Berkshire’s strong insurance operations, ownership of BNSF railroad and dozens of diverse businesses ranging from utilities to manufacturing have helped Buffett compile one of the greatest long-term track records. Berkshire Hathaway stock is up nearly 18% year to date, outperforming the S&P 500.




Please enter your comment!
Please enter your name here

Mezhar Alee
Mezhar Alee
Mezhar Alee is a seasoned basketball journalist with a passion for the WNBA and NBA. His insightful writing combines commentary and stats, providing comprehensive coverage. Alee sheds light on the overlooked WNBA while championing its players. He also delivers in-depth NBA analysis, offering unique perspectives on trades, drafts, and league dynamics. With exclusive interviews and behind-the-scenes access, Alee gives readers an unparalleled look into the lives of basketball's biggest stars.

Related Posts