Skip to Main ContentSkip to Search
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.
Berkshire Operating Earnings Rise 16% in Second Quarter. Buybacks Hit $4.5 Billion.
By Andrew Bary
Updated Aug 08, 2026, 1:52 pm EDT / Original Aug 08, 2026, 8:23 am EDT
Share
Add us on Google
Choose Barron's as a preferred source of financial news
Resize
Reprints
In this article
BRK.B\ \ -0.54% operating earnings after taxes increased 16% in the second quarter to $13 billion on strength at the company’s railroad, energy and manufacturing, service, and retailing unit, the company’s financial results released on Saturday show.
The earnings gain also reflected one-time currency gains in the second quarter that compared with currency losses in the year-earlier period.
The operating profits exclude investment gains and losses.
The company bought back $4.5 billion of stock, up from $235 million in the first quarter, and one of the highest quarterly totals in the past decade.
Advertisement - Scroll to Continue
The level of buybacks isn’t a surprise because a securities filing by CEO Warren Buffett in mid-July indicated that Berkshire bought back anywhere from about $5 billion to $11 billion of stock.
After repurchasing the $4.5 billion in stock, Berkshire continued its buybacks in July. It spent about $3.4 billion through July 29, the date of the 10-Q filing for the second quarter released in conjunction with the earnings report.
The July buyback total is a Barron’s estimate based on a comparison of the July 29 share count and the June 30 share count. Berkshire didn’t break out this figure.
Advertisement - Scroll to Continue
The repurchases are a key figure in the earnings report because investors are interested in the company’s appetite for buybacks under CEO Greg Abel, who succeeded Buffett at the end of last year.
The heavier buyback activity in the second quarter could be taken as a sign that Abel and Buffett think the stock is attractively priced.
Berkshire’s Class A shares, which ended Friday at $780,086, are up 3% this year and are about 10 percentage points behind the S&P 500. The Class B stock finished at $521.80.
Berkshire’s book value rose about 3% sequentially in the second quarter to about $522,000 per Class A share, Barron’s estimates. The stock now trades for about 1.5 times that book value estimate. Berkshire’s book value is probably higher now—closer to about $535,000 because of gains in its equity portfolio of about $350 billion.
The earnings were affected by one-time currency swings related to the company’s borrowings in foreign currencies, mainly Japan’s yen. The yen borrowings help finance and hedge the company’s investments in five Japanese trading companies.
Berkshire had a currency gain of $326 million, compared with a loss of $877 million in the year-earlier period. Strip out the currency swing and the second-quarter operating profits after taxes were up about 6% in the period, Barron’s estimates.
Advertisement - Scroll to Continue
Berkshire, unlike most companies, doesn’t provide commentary in its earnings release and doesn’t adjust its profits for one-time factors like currency.
The operating profits per share topped the consensus estimate including and excluding the currency swings. The operating profits per class A share totaled $9.050, up 17% from the year-ago period and comfortably ahead of the consensus estimate of about $7,550.
The combination of the earnings beat and the buyback activity, particularly in July, could provide a lift to Berkshire stock on Monday.
It’s possible the buyback activity was constrained in the second quarter by the company’s $8.5 billion deal to buy home builder Taylor Morrison, which was reached in late May and closed in July. Companies can be restricted around the time of deal negotiations.
Cash totaled about $365 billion on June 30, down from $380 billion on March 31. The March figure was adjusted for a liability for some $17 billion of Treasury bills purchases at the end of the first quarter.
Advertisement - Scroll to Continue
The adjustment in the most recent period is less than $1 billion. Buffett prefers to keep the bulk of Berkshire’s cash in ultrasafe Treasury bills and Berkshire owned $325 billion on June 30.
While Berkshire’s cash levels are down, they still are by far the most for any U.S. company.
One reason for the cash decline is that Berkshire was a net buyer of about $20 billion of stocks against net sales of about $8 billion in the first quarter.
The company bought $23 billion of stocks in the period, including, including $10 billion of Alphabet shares purchased in June when the search giant announced an equity raise totaling more than $85 billion.
Berkshire sold just $3 billion of stocks, compared with about $24 billion in the first quarter when it liquidated equity investments that had been managed by former manager Todd Combs, who left December for JP Morgan.
The biggest contributor to the earnings gain was the company’s manufacturing, service and retailing unit, which saw a 24% increase in after-tax profits to $4.5 billion.
Advertisement - Scroll to Continue
In its 10-Q filing, Berkshire said the “increases were driven by earnings increases in our industrial products manufacturing and our services businesses.”
The rail unit, BNSF, had a 6% gain in after-tax earnings. Berkshire attributed the increase to “higher shipping volumes and improved operating efficiencies.”
BNSF has one of the lower profit margins of the six big North American railroads and CEO Greg Abel has vowed to improve profitability.
Berkshire Hathaway Energy, the company’s utility business that also operates natural-gas pipelines, had a 27% increase in earnings to $891 million.
Insurance underwriting declined 13.1% to $1.7 billion after taxes despite a lack of material catastrophe losses in the period. The major contributor to the lower underwriting income was a 45% drop in underwriting profits at Geico, Berkshire’s auto insurer, to about $1 billion before taxes.
Geico’s combined ratio—a key profit measure—weakened to 91% from about 83.5% in the year-earlier period. The combined ratio measures losses and expenses as a percentage of premiums; a lower number is more favorable.
Insurance investment income was down 9% to $3.1 billion, reflecting lower short-term rates, which depressed income from Berkshire’s big Treasury holdings and other cash and cash equivalents.
Advertisement - Scroll to Continue
Berkshire’s overall earnings including investment gains more than doubled in the second quarter to $25.7 billion, reflecting mostly paper gains on the company’s equity portfolio.
The company tells investors to focus on operating profits excluding the gains rather than the total figure, which can be distorted by one-time paper gains and losses in Berkshire’s equity portfolio.
Write to Andrew Bary at andrew.bary@barrons.comExternal link
Copyright ©2026Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Read Original at Barron's →