Warren Buffett’s Berkshire Hathaway Inc. said second-quarter earnings rose due to unrealized investment gains, while the company’s cash pile grew to a record. Berkshire reported second-quarter net earnings of $14 billion, or $8,608 per Class A share equivalent, from $12 billion, or $7,301 a share, in the year-earlier period.
Operating earnings, which exclude some investment results, fell to $6.1 billion from $6.9 billion in the year prior.
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Berkshire said its earnings for the first half of the year excluded its share of earnings from its 27% stake in Kraft Heinz Inc., because Kraft Heinz hasn’t provided its earnings to Berkshire. Write-downs at Kraft Heinz weighed on Berkshire’s performance in the fourth quarter of 2018.
Berkshire and private-equity firm 3G Capital formed Kraft Heinz when they merged their H.J. Heinz Co. with Kraft Foods Group Inc. in 2015. Mr. Buffett said earlier this year that he overpaid for Kraft in that deal but didn’t plan to sell.
Berkshire bought back about $440 million of its shares in the second quarter, the company said. Berkshire changed its buyback policy last year, and some shareholders have said they would like the company to spend significantly more cash repurchasing its stock.
The 88-year-old Mr. Buffett, whose shrewd investments have earned him the nickname “the Oracle of Omaha,” still has plenty of cash on hand for future acquisitions as a way to drive profit. Berkshire held a record $122 billion in cash at the end of the second quarter, up from $114 billion at the end of the first quarter.
The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico and See’s Candies.
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Berkshire’s insurance business sits at the core of its moneymaking machine. Insurance brings in billions of dollars of “float,” upfront premiums customers pay and that Berkshire invests for its own gain. Berkshire also holds large stock investments, including in Apple Inc. and Wells Fargo & Co. Last month, Berkshire reported in a filing that it increased its stake in Bank of America Corp. to more than 10%.
Class A shares closed Friday at $306,000, flat for the year.
Mr. Buffett was supposed to meet cryptocurrency promoter Justin Sun for lunch in July after Mr. Sun paid a record $4.6 million in a charity auction. But Mr. Sun abruptly postponed the lunch and apologized on Chinese social media for self-promotion.
Berkshire Hathaway Inc Company Profile:
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.