Warren Buffett’s investment company, Berkshire Hathaway, reported a significant $47 billion gain from stock sales in the second quarter. This gain was primarily attributed to the reduction of its substantial stake in Apple. Despite improvements in the performance of its various owned companies, the paper value of Berkshire’s remaining investments declined, impacting earnings.
The standout move of the quarter was Berkshire’s decision to reduce its holdings in Apple, a stake that Buffett previously described as a key pillar of the company’s business. Additionally, Berkshire made other notable investment changes during the quarter, such as further divestment from the Chinese electric vehicle maker BYD and selling off a portion of its Bank of America stock.
Although the exact number of Apple shares sold was not disclosed in the report, Berkshire estimated the investment to be valued at $84.2 billion by the end of the second quarter, despite Apple’s shares reaching highs of $237.23 during the summer. In comparison, the Apple stake was valued at $135.4 billion at the close of the first quarter.
Berkshire reported earnings of $30.348 billion, or $21,122 per Class A share, for the second quarter, a decrease from $35.912 billion, or $24,775 per share, in the same period last year. Notably, the value of the investments retained by Berkshire dropped by $28.2 billion this year.
Buffett has consistently advised focusing on Berkshire’s operating earnings rather than investment gains and losses to evaluate performance. Operating earnings saw a growth of over 15% to $11.598 billion, or $8,072.16 per Class A share, compared to $10.043 billion, or $6,928.40 per share, a year ago. Geico played a significant role in the improvement of Berkshire’s business performance, while other companies sensitive to economic conditions reported subdued results.
Despite the challenging investment landscape, Berkshire Hathaway exceeded expectations, with its earnings per share surpassing the predictions of analysts surveyed by FactSet Research. The conglomerate’s diverse portfolio includes insurance businesses, the BNSF railroad, utilities, and retail and manufacturing companies like Dairy Queen and See’s Candy.
