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Warren Buffett’s Berkshire Hathaway Inc. said Saturday that second-quarter net earnings rose 7%, boosted by improved results for its railroad, utilities and energy companies.
Berkshire
BRK.B,
BRK.A,
reported second-quarter net earnings of $28.1 billion, or $18,488 per Class A share equivalent, compared with a profit of $26.3 billion, or $16,314 per Class A share equivalent, in the year-earlier period.
Operating earnings, which exclude some investment results, rose to $6.7 billion from $5.5 billion in the year prior. Profits increased within the company’s railroad, utilities and energy divisions but declined at the company’s vast insurance operations.
The company said that earnings for most of its manufacturing, service and retailing businesses declined considerably last year thanks to the coronavirus pandemic, but over the second half of 2020 and into 2021, many of its businesses have recovered and in some cases, now exceed pre-pandemic levels.
The conglomerate runs a large insurance operation as well as a railroad, utilities, industrial manufacturers, retailers and even auto dealerships. It also holds large investments, especially in the stock market. An accounting rule change in recent years has meant that Berkshire’s earnings often reflect the larger performance of the stock market, while operating earnings more accurately reflect the firm’s large business operations.
Despite a reputation for often either purchasing companies outright or making direct loans during these types of times in markets, Buffett’s firm was largely silent for much of the pandemic. The firm’s biggest deal came in the middle of last year when Berkshire announced an agreement to buy Dominion Energy’s midstream energy business for $9.7 billion including debt.
One area Buffett has been active is in buying back Berkshire stock. Last year, Berkshire bought back nearly $25 billion in shares after refusing to buy back company stock for much of the past few decades. On Saturday, Berkshire disclosed that it paid about $6 billion to purchase shares in the second quarter and has spent $12.6 billion in the first six months of 2021 to repurchase its shares.
Berkshire held $144.1 billion in cash at the end of the second quarter, down from about $145.4 billion in cash at the end of the first quarter.
Class A shares closed Friday up 2.1% at $430,160. The shares are up more than 20% for the year.
