Warren Buffett's Berkshire Hathaway reported a 4% drop in operating earnings for the second quarter, driven by weakness in its insurance and railroad businesses. The conglomerate's operating earnings fell to $9.8 billion from $10.2 billion a year earlier, missing analyst expectations.
Key Financial Highlights
Berkshire's insurance underwriting profits declined significantly due to higher claims from severe weather events. The BNSF railroad also saw lower freight volumes, contributing to the earnings shortfall. However, the company's massive investment portfolio, led by Apple and Coca-Cola, provided a boost with realized gains.
Cash Reserves at Record High
Berkshire's cash pile reached a record $200 billion as Buffett continued to hold back from major acquisitions. The company repurchased $1.5 billion of its own stock during the quarter, a slowdown from previous periods.
Despite the earnings miss, Berkshire's revenue rose 5% to $95 billion, driven by growth in its energy and manufacturing units. The company's Class A shares have gained 12% this year, outperforming the S&P 500.
Buffett, 94, did not comment on the results, but analysts noted the company's cautious stance amid high valuations and geopolitical uncertainties. The annual Berkshire shareholder meeting in Omaha drew thousands of investors in May.
