Aug 8 (Reuters) – Berkshire Hathaway began reducing its enormous stockpile of cash in the second quarter, investing billions of dollars in stocks including Alphabet and repurchasing billions more of its own, as it reported higher earnings at its dozens of businesses.
The conglomerate said on Saturday it repurchased $4.5 billion of its own stock in the second quarter and over $3.3 billion more in July, accelerating repurchases it had begun in March following a nearly two-year hiatus.
It also bought nearly $20 billion more stocks than it sold between April and June, ending 14 straight quarters as a net seller of stocks.
Purchases included a $10 billion addition to Berkshire’s already-large investment in Google and YouTube parent Alphabet, which is now one of its largest stock holdings.
Berkshire ended June with $364.7 billion of cash, down from a record $380.2 billion three months earlier.
Second-quarter operating profit rose 16% to $12.98 billion, or about $9,068 per Class A share, from $11.16 billion a year earlier.
The results benefited from higher earnings at the BNSF railroad and from manufacturing, service and retail operations, and from foreign currency fluctuations.
Net income more than doubled to $25.67 billion, or about $17,928 per Class A share, from $12.37 billion. Year-earlier results included a $3.76 billion writedown for Berkshire’s stake in the packaged food company Kraft Heinz.
The quarter was the second since Greg Abel became Berkshire’s chief executive, succeeding Warren Buffett, who remains chairman.
Investors and analysts have been eager to see how Abel’s approach to managing Berkshire’s capital differs from that of Buffett, who had difficulty deploying cash toward the end of his 60 years at the helm of his Omaha, Nebraska-based conglomerate.
The pace of stock repurchases is comparable to Buffett’s peak pace early this decade.
Berkshire’s biggest year for buybacks was 2021, when it repurchased $27 billion of stock.
(Reporting by Jonathan Stempel in New York; Editing by Sharon Singleton and Susan Fenton)
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