Berkshire Operating Earnings Rise 16% in Second Quarter. Buybacks Hit $4.5 Billion -- Barrons.com

By Andrew Bary

Berkshire Hathaway's operating earnings after taxes increased 16% in the second quarter to $13 billion on strength at the company's railroad, energy and manufacturing, service, and retailing unit, the company's financial results released on Saturday show.

The earnings gain also reflected one-time currency gains in the second quarter that compared with currency losses in the year-earlier period.

The operating profits exclude investment gains and losses.

The company bought back $4.5 billion of stock, up from $235 million in the first quarter, and one of the highest quarterly totals in the past decade.

The level of buybacks isn't a surprise because a securities filing by CEO Warren Buffett in mid-July indicated that Berkshire bought back anywhere from about $5 billion to $11 billion of stock.

After repurchasing the $4.5 billion in stock, Berkshire continued its buybacks in July. It spent about $3.4 billion through July 29, the date of the 10-Q filing for the second quarter released in conjunction with the earnings report.

The July buyback total is a Barron's estimate based on a comparison of the July 29 share count and the June 30 share count. Berkshire didn't break out this figure.

The repurchases are a key figure in the earnings report because investors are interested in the company's appetite for buybacks under CEO Greg Abel, who succeeded Buffett at the end of last year.

The heavier buyback activity in the second quarter could be taken as a sign that Abel and Buffett think the stock as attractively priced.

Berkshire's Class A shares, which ended Friday at $780,086, are up 3% this year and are about 10 percentage points behind the S&P 500. The Class B stock finished at $521.80.

The earnings were affected by one-time currency swings related to the company's borrowings in foreign currencies, mainly Japan's yen. The yen borrowings help finance and hedge the company's investments in five Japanese trading companies.

Berkshire had a currency gain of $326 million, compared with a loss of $877 million in the year-earlier period. Strip out the currency swing and the second-quarter operating profits after taxes were up about 6% in the period, Barron's estimates.

Berkshire, unlike most companies, doesn't provide commentary in its earnings release and doesn't adjust its profits for one-time factors like currency.

The operating profits per share topped the consensus estimate including and excluding the currency swings. The operating profits per class A share totaled $9.050, up 17% from the year-ago period and comfortably ahead of the consensus estimate of about $7,550.

Cash totaled about $365 billion on June 30, down from $380 billion on March 31. The March figure was adjusted for a liability for some $17 billion of Treasury bills purchases at the end of the first quarter.

The adjustment in the most recent period is less than $1 billion. Buffett prefers to keep the bulk of Berkshire's cash in ultrasafe Treasury bills and Berkshire owned $325 billion on June 30.

While Berkshire's cash levels are down, they still are by far the most for any U.S. company.

One reason for the cash decline is that Berkshire was a net buyer of about $20 billion of stocks against net sales of about $8 billion in the first quarter.

The company bought $23 billion of stocks in the period, including, including $10 billion of Alphabet shares purchased in June when the search giant announced an equity raise totaling more than $85 billion.

Berkshire sold just $3 billion of stocks, compared with about $24 billion in the first quarter when it liquidated equity investments that had been managed by former manager Todd Combs, who left December for JP Morgan.

Write to Andrew Bary at andrew.bary@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 08, 2026 09:02 ET (13:02 GMT)