Berkshire Beats Profit Forecasts, Accelerates $7.8 Bn Buybacks
Synopsis
The conglomerate stepped up share repurchases, increased investments including Alphabet and reduced its cash pile to US$364.7 billion as operating earnings exceeded expectations.
Key Highlights
- Berkshire bought back $4.5 billion of its own shares from April to June and more than $3.3 billion in July.
- Berkshire purchased about $20 billion more stock than it sold in Q2.
- Quarterly operating profit increased by 16% to $12.98 billion.
- Cash dropped to $364.7 billion as of the end of June from $380.2 billion three months earlier.
Berkshire Hathaway stated it started to offset its large cash position during the second quarter, deploying billions of dollars in stocks such as Alphabet and buying back billions of dollars of its own shares with profits beating estimates.
Between April and June, the company repurchased $4.5 billion of its own stock and more than $3.3 billion in July. It was then that buybacks resumed for the first time in March after a near two-year pause.
In addition, Berkshire purchased almost $20 billion more stocks than it disposed of in the quarter, breaking a string of 14 straight quarters where it was a net seller of shares.
Alphabet Investment and Quarterly Profit
Berkshire increased its stake in Alphabet, the parent of Google and YouTube, by $10 billion. Alphabet has become one of the largest stock holdings in Berkshire.
Operating profit for the quarter climbed 16% to $12.98 billion as better results at BNSF railroad and NetJets and TTI helped offset weakness at Geico. This included unrealised gains and losses on stocks that Berkshire still owns, so the net income more than doubled to $25.67 billion. Revenue climbed 10% to $101.81 billion.
Berkshire added that ambiguity lingered around macroeconomic and geopolitical situations, including tariffs and wars. The company also said declining consumer demand for businesses including its 103 car and truck dealerships, Fruit of the Loom and Forest River reflected an economic change in consumer confidence.
This was the second quarter with Greg Abel as chief executive at Berkshire, having replaced Warren Buffett who continues as chairman.
Berkshire’s Cash Holdings Fall
As of the end of June, Berkshire had $364.7 billion in cash, down from a record $380.2 billion three months earlier. The reported cash amount includes the purchase of home builder Taylor Morrison for $6.8 billion that Berkshire made in late July.
Class A shares of Berkshire have risen 3% this year versus a 13% gain for the S&P 500. Buffett announced in May 2025 that he would be stepping down as chief executive, a catalyst followed by relative share price performance lagging the index by 40 percentage points.
Impact of Geico results on Insurance Profit
The pre-tax underwriting profit at Geico declined 45% as accident claims rose and marketing costs increased. That loss of cross-business caused the car amortisation companies to realise that they had to make better underwriting choices and cut down on overheads and made them increase advertising spending.
Profits from insurance and reinsurance were down 11% overall.
BNSF, meanwhile boosted profit 6% to $1.56 billion, as the railroad shipped higher volumes of consumer, agricultural and energy products and raised fuel surcharges. Berkshire Hathaway Energy earnings increased 27% to $891 million, reflecting higher utility margins and tax credits.
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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