Berkshire Hathaway had a stronger second quarter, with operating earnings rising 16% to $12.98 billion as its energy, railroad and manufacturing businesses delivered solid results. Insurance was a weaker spot, with underwriting earnings and investment income both declining from a year earlier.
The bigger story, however, is how new CEO Greg Abel is beginning to use the enormous cash pile built up under Warren Buffett. Berkshire spent about $4.5 billion buying back its own shares in the quarter, a sharp increase from just $235 million in the first quarter. The company also became a net buyer of stocks, purchasing nearly $20 billion after selling equities for 14 straight quarters.
Berkshire’s cash holdings fell to $365.5 billion by the end of June, down from a record $397.4 billion three months earlier. The company also completed its acquisition of Taylor Morrison and now counts Alphabet among its five largest stock holdings. The moves suggest Abel is becoming more willing to put Berkshire’s cash to work while still following Buffett’s cautious approach.
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