Berkshire Hathaway, the conglomerate led by billionaire Warren Buffett, announced its highest ever quarterly operating profit on Saturday. The company also swung to an overall profit of nearly $36 billion, thanks to gains from its stock holdings.
Rising interest rates and dividend payouts, along with a rebound in performance at the Geico car insurer, have led to increased profitability for Berkshire’s insurance businesses. In fact, profit was up 38 percent compared to the second quarter of 2022. Berkshire attributed Geico’s positive results to rising premiums and reduced advertising expenses.
While some of Berkshire’s businesses, such as its BNSF railroad, experienced declines in profit, the overall impressive performance helped offset those setbacks. Lower shipments of consumer goods and increased price competition from the trucking industry led to a 24 percent drop in profit for the BNSF railroad.
Investors closely follow Berkshire’s performance not only because of Warren Buffett’s reputation as a savvy investor, but also because the conglomerate’s results often reflect broader economic trends.
Berkshire Hathaway’s varied portfolio includes Berkshire Energy, several industrial companies, and well-known brands like Dairy Queen, Duracell, Fruit of the Loom, and See’s Candies.
The company, headquartered in Omaha, reported a 7 percent increase in operating profit for the quarter, reaching $10.04 billion compared to $9.42 billion the previous year. Net income for the quarter totaled $35.91 billion, a significant improvement from the $43.62 billion loss in the second quarter of 2022.
During the quarter, Berkshire repurchased $1.4 billion in stock and remained a significant net seller of stocks from its equity holdings, which amount to $353 billion. The company shed approximately $8 billion more in stocks than it purchased. As a result, Berkshire’s cash stake grew to $147.4 billion as of June 30, up from $130.6 billion three months earlier.
This quarter was the first full period to include results from Pilot, the truck stop operator in which Berkshire now owns an 80 percent stake. Pilot contributed $114 million to operating profit.
Warren Buffett, the chairman and chief executive of Berkshire, will celebrate his 93rd birthday on August 30. According to Forbes magazine, he is currently worth $117.5 billion and is the sixth-richest person in the world.
Berkshire’s class A shares closed on Friday at $533,600, slightly below their record high. The shares have seen a 14 percent increase in value this year, while the S&P 500 index has gained 17 percent.
