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(Bloomberg) — Berkshire Hathaway Inc. spent about $4.5 billion to buy back its own shares in the second quarter, providing shareholders with the largest quarterly payout since 2021, as operating earnings surged.
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That metric climbed to 16% in the three months through June, to nearly $13 billion, driven in part by gains in the conglomerate’s manufacturing, service and retailing division, the Omaha, Nebraska-based conglomerate said Saturday in a statement.
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The firm’s cash hoard fell to $365.5 billion in the second quarter, as its net purchases of equities reached nearly $20 billion in the period, a sign that Chief Executive Officer Greg Abel is putting more of the firm’s cash pile to work.
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Halfway through his first year at the helm of Berkshire Hathaway, Abel has been praised by shareholders for his leadership.
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Still, Berkshire’s Class B shares rose 3.8% this year as of market close Friday, compared with a roughly 13% gain for the S&P 500 — a benchmark that Berkshire Chairman Warren Buffett himself frequently cited.
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Berkshire’s earnings are typically closely watched because the conglomerate’s businesses — ranging from insurance to railroads to energy and manufacturing — provide a snapshot of the health of the US economy.
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Berkshire started buying back its own shares in the first quarter for the first time in more than a year. Earlier this year, Abel said Berkshire was restarting buybacks because executives found the “intrinsic value” of those shares exceeded their market price.
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After years of relatively quiet deal activity under Buffett, who often complained of high market valuations, his successor sealed back-to-back multibillion-dollar transactions.
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The newly minted CEO spent $6.8 billion to buy homebuilder Taylor Morrison Home Corp., a typical value bet, while also handing $10 billion to Google parent Alphabet Inc. to support its investments related to artificial intelligence, a new area for the conglomerate.
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The deal brings Alphabet among Berkshire’s top five holdings at the end of the quarter, replacing Chevron Corp.
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