Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders before their annual meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogan
Berkshire HathawayHis cash pile swelled to $276.9 billion last quarter as Warren Buffett sold big chunks of stocks, including apple.
The conglomerate’s cash hoard jumped significantly higher than the previous record of $189 billion, set in the first quarter of 2024. The increase came after the Oracle of Omaha sold nearly half of its stake in the tech giant under Tim Cook in second quarter.
Berkshire has been a stock seller for seven straight quarters, but those sales accelerated in the latest period with Buffett shedding more than $75 billion in stocks in the second quarter. That brings the total shares sold in the first half of 2024 to more than $90 billion. Buffett’s selling continued in the third quarter in some areas, with Berkshire reducing its second-largest holding, Bank of America, for 12 straight days, according to a filing this week.
For the second quarter, Berkshire’s operating profit, which includes earnings from the conglomerate’s wholly-owned businesses, jumped on the strength of auto insurer Geico. Operating profit was $11.6 billion in the second quarter, up about 15% from $10 billion a year earlier.
Buffett, who turns 94 at the end of the month, admitted at Berkshire’s annual meeting in May that he is willing to deploy funds but that high prices give him pause.
“We’d like to spend it, but we won’t spend it if we don’t think about it [a business is] Doing something that has very little risk and can make us a lot of money,” the investment icon said at the time. “It’s not like I went on a hunger strike or anything like that. It’s just… things aren’t attractive.”
The conglomerate bought back just $345 million worth of its own stock in the second quarter, significantly lower than the $2 billion it repurchased in each of the previous two quarters.
The S&P 500 has surged over the past two years to record highs as investors bet the Federal Reserve would curb inflation with higher interest rates while avoiding an economic recession. So far, that has happened with the S&P 500 rising 12% in 2024. However, worries about a slowing economy have been rekindled recently by some weak data, including Friday’s disappointing July jobs report. The Dow Jones Industrial Average lost 600 points on Friday. Investors have also recently grown concerned about valuations in the technology sector, which has driven the bull market on optimism surrounding artificial intelligence innovation.
Geico is growing profits
Geico, the company Buffett once called his “favorite child,” posted nearly $1.8 billion in pretax profit in the second quarter, more than tripling the $514 million level from a year ago.
Earn BNSF Railway it reached $1.6 billion, according to last year’s figure. Berkshire Hathaway Energy Utilities saw earnings fall to $326 million, nearly half of the $624 million from the same quarter a year earlier. BHE continues to face pressure over potential fire liability.
Berkshire Hathaway ‘A’ shares, year over year
Berkshire’s net income, which includes short-term gains or losses on investments, fell to $30.3 billion in the second quarter from $35.9 billion in the same period a year ago. Buffett cautions investors against paying attention to quarterly fluctuations in unrealized investment gains, which can be “extremely misleading.”
