In its second-quarter earnings on Saturday, Warren Buffet's company revealed a strong performance from its operating businesses, less activity in the stock market, and a slower rate of share purchases.
Pre-tax earnings from the conglomerate's operating businesses rose 16% to $10 billion as revenues increased 10%. A decline in the value of its investment portfolio resulted in a $43 billion net loss for the company.
In the period, the company bought and sold $6.2 billion worth of stock. The net $41 billion it put into stocks in the first quarter was a big decrease. In the year 2020, and in the year 2021, the company was a net seller of stock.
In the first three months of the year, the company spent about $3.2 billion, but in the last three months it spent only $1 billion.
The cash pile was almost unchanged at $105 billion. In the first quarter, it decreased by 28%.
The purchase of Greg Abel's 1% stake in the subsidiary lifted the company's ownership to nearly 99%. There is a planned successor to Buffett as CEO.
During the first two years of the epidemic, stocks soared to record highs, private equity firms and special-purpose acquisition companies drove up the price of acquisitions, making it difficult for the team to find bargains.
In the last few months, the company has increased its buying. Over the course of 29 days this year, it has poured $10 billion into the stock of the company. It struck a deal to acquire Alleghany in less than two weeks, after increasing its stake in Chevron to 8%.
"The businesses demonstrated broad revenue strength, but investment income was also quite strong, up $825 million year on year," according to a senior equity analyst at Edward Jones.
Berkshire is benefiting from higher interest rates and increased dividends. Investment income will be greatly increased in the second half of 2022.
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