Berkshire Hathaway Update
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Warren Buffett’s Berkshire Hathaway reported that profits rose by 7% in the second quarter, and many companies owned by this large conglomerate benefited from the economic recovery.
The investment company disclosed on Saturday that it had earned US$28.1 billion in the three months to the end of June, or US$18,488 per A share.
Excluding the operating profit of Berkshire Hathaway’s investment value fluctuations, Buffett used it as the preferred indicator to measure the company’s performance. Operating profit increased by 21% from the same period last year to US$6.7 billion.
Berkshire Hathaway’s performance is almost entirely optimistic. Its BNSF railroad profits increased by 34%, and its pre-tax revenues for its divisions that build houses and make parts for new buildings increased by 40%. The rebound offset the weak performance of the company’s huge stock portfolio.
As the United States rebounds from the worst economic disruption of the pandemic, this improvement reflects stronger data for most US companies.
According to data from data provider Refinitiv, S&P 500 index component companies’ profits in the second quarter increased by 93% year-on-year. With the rebound in consumer and industrial demand, many companies’ performance exceeded Wall Street’s expectations.
Berkshire Hathaway’s closely watched cash reserves fell to US$144 billion, a decrease of US$1.4 billion from the previous year. It spent $6 billion to repurchase its own stock this quarter, slightly lower than the $6.6 billion used to repurchase shares in the first three months of this year.