Berkshire Reduces Its Cash Stake and Speeds Up Buybacks

As it posted higher-than-expected profit, Berkshire Hathaway (BRKa.N), opens new tab, said it started to reduce its massive cash stockpile in the second quarter, investing billions of dollars in equities like Alphabet and repurchasing billions of its own.

The conglomerate announced on Saturday that it accelerated repurchases it started in March after a nearly two-year break, repurchasing $4.5 billion of its own stock between April and June and over $3.3 billion more in July.

Additionally, Berkshire ended 14 consecutive quarters as a net seller of shares by purchasing about $20 billion more equities than it sold.

Among the purchases was a $10 billion increase to an already substantial investment in Alphabet (GOOGL.O), the parent company of YouTube and Google, which is now one of its biggest stock holdings.

Improvements at the BNSF railroad and service businesses, such as the NetJets luxury airline company and TTI electronic components distributor, helped offset difficulties at the Geico auto insurance, resulting in a 16% increase in quarterly operating profit to $12.98 billion, exceeding analyst projections.

Including unrealized gains and losses on equities that Berkshire, based in Omaha, Nebraska, still owns, net income more than doubled to $25.67 billion. Berkshire advises investors to disregard the ensuing volatility.

After stagnating, revenue increased by 10% to $101.81 billion.

According to Berkshire, there is still “considerable uncertainty” regarding macroeconomic and geopolitical developments, such as wars and tariffs.

Additionally, it stated that declining demand at consumer businesses, such as its 103 car and truck dealerships, Fruit of the Loom underwear, and Forest River RVs, is indicative of shifts in consumer confidence.

The quarter was the second after Warren Buffett, who is still chairman, was replaced as CEO of Berkshire by Greg Abel.

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