Warren Buffett-led Berkshire Hathaway, Inc. BRK BRK reported second-quarter net earnings on Saturday that fell year-over-year as a decline in investment gains more than offset an increase in operating earnings. The company’s offloading of its stake in tech giant Apple, Inc. APPL continued.
Berkshire’s Key Q2 Metrics: Second-quarter net earnings fell 15.50% year-over-year from $35.91 billion to $30.35 billion. Operating earnings, which refer to income generated by its portfolio companies, climbed 15.48% to $11.60 billion. On the other hand, gains from its investment portfolio fell 27.52% to $18.75 billion.
The fall in the investment gains came amid volatile market conditions. Taking the S&P 500 as a proxy to the broader market performance, the equity market rose 3.92% in the second quarter. The index gyrated between a high and low of 5,523.64 and 4,953.56, respectively during the quarter.
The 10-year U.S. note yield remained above the 4% level, moving between 4.188% and 4.638%.
The net earnings per Class A share fell from $24,775 in the second quarter of 2023 to $21,122 in the second quarter of 2024.
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Operating Earnings – Segment-wise Breakdown: Insurance and insurance investment income rose 81.5% and 40.1%, respectively to $2.26 billion and $3.32 billion.
Operating earnings from freight and railroad operator BNSF slipped slightly at $1.23 billion. Berkshire Hathaway Energy Company earnings and operating income contribution from other businesses declined 16.6% and 3.51%, respectively, to $655 million and $3.38 billion, respectively.
Investment Holdings: Disclosure regarding key portfolio holdings show that Berkshire trimmed its core holdings to 72% of its total equity holdings from 79% at the end of the December quarter. Fair value of the company’s equity investments was at $284.9 billion compared to $335.9 billion at the end of the first quarter.
The aggregate fairly value of the five core holdings and changes in stake versus the first quarter as follows:
| End-Q2’24 | End-Q1’24 | Change (%) | |
| Apple | $84.2B | $135.4B | -37.8% |
| Bank of America, Inc. BAC | $41.1B | $39.2B | +4.9% |
| American Express Co. AXP | $35.1B | $34.5B | +1.7% |
| Coca-Cola Co. (NYSE: KO | $25.5B | $24.5B | +4.1% |
| Chevron Corp. (NYSE: CVX) | $18.6B | $19.4B | -4.1% |
Berkshire began trimming its Apple stake in the first quarter and Buffett said at the annual shareholder meeting that Apple will continue to be its top holding. He attributed the trimming to raise cash during uncertain economic conditions and to foot its federal tax bill.
Fair value of investments in fixed maturity securities fell slightly to $16.6 billion, down from $17.2 billion at the end of the March quarter.
Cash Swell: Berkshire’s cash and cash-equivalents ballooned to $276.94 billion at the end of the second quarter, up from roughly $189 billion at the end of the first quarter.
Berkshire Class A shares listed on the NYSE has gained 18.21% for the year-to-date period compared to the 12.83% gain for the SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the broader S&P 500 Index. They ended Friday’s session down 0.86% at $641,435, according to Benzinga Pro data.
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