Warren Buffett, CEO and chairman of Berkshire Hathaway.
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Shares of Berkshire Hathaway surged on Monday following a robust quarterly report that showcased a recovery in insurance operations, along with a substantial cash reserve that exceeded $150 billion.
The Class B shares of Warren Buffett’s conglomerate rose by 1.6% during premarket trading, positioning them close to a record closing high. The Omaha-based company disclosed that its operating earnings rose by 6.6% year over year, reaching $10.04 billion in the last quarter.
The earnings from insurance underwriting experienced a massive surge of 74%, totaling $1.25 billion, benefiting from increased interest rates and reduced catastrophic losses. The strong performance in insurance countered the dip in railroad operations due to lower volumes.
Furthermore, Berkshire’s cash reserves swelled to $147.38 billion by the end of June, reaching near-record levels and significantly exceeding the $130.62 billion reported in the first quarter.
The higher interest rates have enabled Berkshire to generate substantial returns from its cash holdings. The conglomerate held over $97 billion in short-term Treasury bills. Warren Buffett had previously disclosed that he was purchasing $10 billion worth of 3-month or 6-month T-bills every Monday.
“Berkshire Hathaway’s resilient earnings demonstrate the value of its diversified business portfolio, contributing to the growth of its cash reserves,” said Bill Stone, Chief Investment Officer at Glenview Trust and a Berkshire shareholder.
In addition, Berkshire reported an unrealized gain of nearly $26 billion from its investments, with a significant portion of this gain attributed to its substantial stake in Apple. The tech giant’s strong performance during the second quarter, with a surge of almost 18%, fueled the market rally. Berkshire’s investment in Apple has now reached a value of $177.6 billion.
Berkshire’s Class A shares reached a new record of $541,000 at market close on Thursday, surpassing the conglomerate’s previous high of $539,180 achieved on March 22, 2022. The stock has gained 13.8% in value this year.
“Given the uncertain macro environment, we believe that BRK’s shares remain an attractive investment,” noted Brian Meredith, a Berkshire analyst at UBS.
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