Warren Buffett. AP ImagesWarren Buffett's Berkshire Hathaway reported its second quarter earnings on Saturday.The company of the investor sold $1 billion worth of stock and slowed down buybacks to $6 Billion.Berkshire also increased its minimum cash reserve, and staged a wide-based recovery.Check out more stories from Insider's business page.Warren Buffett's Berkshire Hathaway released its second quarter earnings report on Saturday. It revealed that it sold more shares and reduced share buybacks during the three months up to June 30.This conglomerate, which is a well-known investor, owns dozens of businesses including Geico, See's Candies and the BNSF Railroad. It also owns multibillion-dollar stakes at Coca-Cola and Kraft Heinz as well as other public companies. The company's earnings gave a valuable insight into the state of the US economy in the last quarter, given the size and breadth its operations. These include insurance, energy, manufacturing, and retail.These are the key takeaways of its most recent earnings report.1. Stock salesBerkshire spent $1 billion on equities, and it sold $2.1 billion of stock. This made Berkshire a net $1.1 million stock seller last quarter. This compares to net stock sales of $4B in the first quarter. It suggests that Buffett is becoming more comfortable with his portfolio but still prefers shrinking rather than growing it. The value investor can't find bargains in a market where the US stock markets are at record highs.Berkshire has sold $9 billion in stocks to date, which means Buffett and his team have sold $14 billion worth of equity securities within 18 months. JPMorgan, Goldman Sachs and the "Big Four" US airlines have been sold by Berkshire. This means that five stocks account for approximately 75% of its stock portfolio, which is around $300 billion.The company's latest earnings revealed that its cost basis for "commercial, industrial and other" stock holdings decreased by 10% to $43 billion in the last quarter. This could indicate that Chevron sold more Chevron stock, after it had reduced its stake in the energy company by half in the first quarter. It also continued to reduce its pharmaceutical holdings and General Motors positions in the same period.2. Buybacks of sharesBuffett's company spent $6B on share repurchases in the last quarter. This is down from $6.6B in the first quarter and $9B in each of the previous quarters. This downward trend indicates that Buffett sees Berkshire stock, which rose 9% last quarter after jumping 12% the previous quarter, as less bargain than it was six months ago.Berkshire still has $37 billion to invest in buybacks within 18 months. This is far more than its $5 billion and $1.3 billion spends in 2018.Based on the decline of its outstanding shares during the period, Berkshire seems to have spent $1.7 billion more on repurchases in the third quarter. This suggests that Berkshire continues to spend approximately $2 billion per month on buybacks.3. 3.Buffett has been telling shareholders for more than a decade that he will not conduct buybacks if it would lower the value of Berkshire cash, cash equivalents and Treasury bills below $20 billion. In his latest earnings report, Buffett raised the figure to $30 Billion to show that he is committed to maintaining a greater safety net.Buffett might still underestimate his cash cushion. Berkshire's annual meeting was held in May. Buffett stated that the company had $70billion or $80billion that he would love to "put to work." Berkshire's cash pile was approximately $140 billion at the time. His comment suggests that he would like the company to have $60 to $70 billion saved up for a rainy-day.4. 4.As the US economy reopened and saw broad-based growth, Berkshire reported broad-based economic growth in the second quarter. This boosted demand for many of its services and products.As home construction, bricks and paint increased, the revenue of the company's building products group soared by 29%. As freight volumes for consumer, industrial, and agricultural products rose, the BNSF Railway saw a 26% rise in its revenue.Revenue for the real-estate section grew 48% because Berkshire's broker-franchise and brokerage network benefited from the housing boom. Sales also jumped 29% in the auto-dealer segment, 52% at electronic-components distributor TTI, and 48% at Marmon, an industrial holding company that serves the construction, automotive, and restaurant markets, among others.Geico's pretax earnings from underwriting plummeted 70% due to Americans returning to the roads and increased auto-insurance claims. Precision Castparts saw lower revenues due to a lack of demand for aerospace components.5. 5.Berkshire's most recent earnings pointed to price increases in many markets, which points to higher inflation.The BNSF Railway saw its fuel costs rise 112% due to higher fuel prices. However, coal revenues jumped 42% because energy customers were not happy with the high natural-gas prices. Marmon was able to profit from higher metal prices and pass them on to its customers.Berkshire's building products group increased its prices to meet strong demand and supply disruptions. This drove up the cost of lumber, steel and copper as well as freight and fixtures.
