Warren Buffett's Berkshire Hathaway, Inc. (NYSE: BRK.A) reported Saturday second-quarter results that showed a modest increase in operating income. The firm's investment income also reversed to a gain from a loss a year ago, thanks to the equity market rally seen in the quarter.
What Happened: Omaha, Nebraska-based Berkshire Hathaway, an investment holding company, said its third-quarter operating earnings came in at $10.04 billion, higher than last year's $9.42 billion in earnings. Operating earnings are derived from the companies Berkshire owns.
The increase in the operating income reflected an increase in insurance underwriting income from $715 million to $1.25 billion. The insurance investment income also climbed from $1.91 billion to $2.37 billion.
On the other hand, the firm's income from rail transportation company BNSF fell and its energy-company earnings remained flat.
Berkshire Hathaway's investment and derivative gains were $25.87 billion compared to a loss of $53.04 billion. The strong performance reflected investment gains from equity securities as the stock market rallied in the second quarter.
Gains from investment in equities were at $33.05 billion compared to a loss of $66.86 billion a year ago, when the stock market dove amid the economic uncertainties.
The company reversed to a net profit of $35.91 billion from a loss of $43.62 billion in the same quarter last year. Net earnings per Class A share came in at $24.78, reversing from a loss of $29.66 in the same period last year.
Berkshire's cash and cash equivalents increased from $128.59 billion at the end of 2022 to $147.377 billion at the end of the June quarter.
Berkshire's Blue Chip Bets: About 78% of Berkshire's aggregate fair value of equity investments were concentrated in five companies at the end of the second quarter.
- Apple, Inc. (NASDAQ: AAPL): $177.6 billion
- Bank of America Corp. (NYSE: BAC): $29.6 billion
- American Express Co. (NYSE: AXP): $26.4 billion
- Coca-Cola Co. (NYSE: KO): $24.1 billion
- Chevron Corp. (NYSE: CVX): $19.4 billion
Stock Action: Berkshire Hathaway's Class A shares closed at $533,600, down 1.37% on Friday, according to Benzinga Pro data. The stock scaled a new closing record of $541,000 in the previous session.