Berkshire Hathaway Inc. repurchased approximately $4.5 billion of its own shares in the second quarter of 2023, marking its largest quarterly buyback since 2021. The company's operating earnings rose 16% during this period, reaching nearly $13 billion, driven by gains in its manufacturing, service, and retail divisions, according to a statement released on Saturday.
Key Details
Berkshire's cash reserves decreased to $365.5 billion, down from nearly $400 billion at the end of March. The firm also invested about $10 billion in Alphabet Inc., the parent company of Google, as part of its strategy to deploy its cash pile more aggressively under new CEO Greg Abel. Abel, who took over from Warren Buffett in January, has been praised for his leadership, especially after resuming share buybacks for the first time in over two years.
Despite the buyback, some investors expressed disappointment, as the repurchase amount fell below expectations. Analysts had predicted buybacks in the range of $5 billion to $11 billion based on earlier comments from Buffett. Most of the repurchases occurred in June, and the company has indicated it will only buy back shares when they are perceived to be undervalued.
Background
The earnings report also noted that Berkshire added over $24 billion in various stocks to its portfolio, although specific details of these acquisitions will be disclosed in a separate filing later this month. The company's Class B shares have risen 3.8% this year, compared to a 13% gain for the S&P 500 index, which Buffett often references.
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The significant share buyback and investment in Alphabet may influence Berkshire's stock price and investor sentiment, particularly in the context of its recent performance compared to broader market indices. Investors will watch for the upcoming filing that will detail the specific stocks added to Berkshire's portfolio.
Based on reporting by: livemint.com