Berkshire Hathaway Q2 Earnings Rise 16%, Buybacks Surge

Berkshire Hathaway posted operating earnings of $12.98 billion in the second quarter, a 16% increase from $11.16 billion a year earlier. The conglomerate’s net income more than doubled to $25.67 billion from $12.37 billion, bolstered by double-digit gains in common stock investments including Apple and Alphabet. Strength across energy, railroad, and manufacturing businesses more than offset weaker insurance results during the quarter.

The conglomerate’s manufacturing, service and retailing earnings jumped 24% to $4.47 billion, while Berkshire Hathaway Energy profit surged 27% to $891 million. BNSF, the company’s railroad division, posted a 6% increase to $1.56 billion. These robust performances demonstrated the breadth of Berkshire’s diversified operations.

Insurance operations represented a weak spot in the quarterly results. Underwriting earnings fell 13% to $1.73 billion from $1.99 billion a year earlier, while insurance investment income declined 9% to $3.06 billion. The insurance segment’s underperformance contrasted sharply with gains across the company’s other major business lines.

Abel Accelerates Capital Deployment

The bigger takeaway from the quarterly results centers on CEO Greg Abel, 64, beginning to put the record cash hoard amassed by Warren Buffett to work through buybacks and stock purchases. Berkshire repurchased approximately $4.5 billion of its own shares during the quarter, the second fiscal period under Abel, who took over from Buffett at the start of the year. The second quarter purchases marked a sharp acceleration from the $235 million spent on buybacks in the first three months of 2026.

Berkshire’s cash pile declined to $365.5 billion at the end of June from a record $397.4 billion three months earlier, as the conglomerate deployed capital through other investments along with the buybacks. The quarter included the closing of Berkshire’s acquisition of Taylor Morrison, further demonstrating Abel’s willingness to pursue strategic opportunities.

The $4.5 billion in share repurchases represented a meaningful deployment of capital, though some market observers had anticipated even larger buybacks given the company’s substantial cash position. A Barron’s analysis of SEC filings in July indicated Berkshire Hathaway’s Class A share count declined by around 11,000 between April 14 and July 14. Due to rounding and estimating the average share price of repurchases, some analysts suggested the actual amount could be as high as $11 billion, which would set a new quarterly record for the business.

Berkshire Becomes Net Buyer of Equities

Berkshire reversed a pattern of selling stocks, becoming a net buyer of equities in the second quarter with nearly $20 billion in net purchases. The conglomerate had been a net seller of stocks for 14 consecutive quarters before the latest period, making this shift particularly noteworthy for shareholders and market watchers. This strategic pivot signals Abel’s view that attractive investment opportunities now exist in the equity market.

Buffett, now chairman, handed Abel a cash fortress unprecedented in corporate America, but in accordance with the 95-year-old legendary investor’s patient and risk averse approach. Buffett had indicated for a while that he was having trouble finding any values in the equity market, leading to the prolonged period of net selling. Shareholders have been clamoring for Abel to put some of that cash to work outside of Treasuries.

The filing indicated Alphabet is now among Berkshire’s five largest equity holdings by market value at the end of June, alongside its longtime holdings American Express, Apple, and Bank of America. This portfolio composition reflects both new investments and the appreciation of existing positions during the quarter.

Bullish Signal for Shareholders

When Berkshire Hathaway buys back its own shares, it typically signals that management believes its shares are undervalued. Chairman Warren Buffett has decried companies that repurchase shares without regard for their stock’s price or value, making Berkshire’s buyback activity particularly meaningful. Berkshire’s share repurchase authorization permits repurchases only when the Chief Executive Officer, after consultation with the Chairman of the Board, believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.

If Berkshire did buy back $11 billion worth of shares in the second quarter, it would represent the largest repurchase in the company’s history. The previous record occurred in the fourth quarter of 2020, when Buffett bought back $9 billion worth of Berkshire stock. Such a record-setting buyback would indicate extreme bullishness on the part of Abel and Buffett, and help reduce the massive cash pile on the company’s balance sheet.

Shares of Berkshire are up just 3% on the year, underperforming the S&P 500‘s 13% gain. The stock has been on the move lately, rising 9% over the last three months, suggesting growing investor confidence in Abel’s leadership and capital allocation decisions.

Abel’s Early Leadership Record

Earlier this year, CEO Greg Abel announced that Berkshire Hathaway resumed its share repurchase program in March following a nearly two-year hiatus. The company has a market cap of more than $1 trillion, making even substantial buyback programs appear modest in relative terms. The first-quarter earnings report revealed just $235 million in total share repurchases that month, practically unnoticeable for a company of Berkshire’s scale and disappointing to many investors.

The second quarter’s significantly larger buyback activity demonstrates Abel’s growing comfort with deploying capital and suggests he sees compelling value in Berkshire’s own shares. The combination of share repurchases, equity purchases, and strategic acquisitions marks a clear shift from the capital preservation mode that characterized Buffett’s final years as CEO. As Abel continues to put the company’s substantial cash reserves to work, shareholders will be watching closely to see if this quarter represents the beginning of a sustained period of active capital deployment.