Warren Buffett’s Berkshire Hathaway Cuts Apple Stake and Reports Earnings Drop
Investor Warren Buffett’s company, Berkshire Hathaway, made headlines in the second quarter by significantly reducing its stake in Apple, resulting in a $47 billion revenue boost from stock sales. While many of the companies in Berkshire’s portfolio are performing well, the overall earnings were negatively impacted by the declining book value of its remaining investments.
Significant Investment Moves
The decision to sell off a large portion of Apple stock was a major strategic move for Buffett, who has previously referred to the tech giant as the backbone of Berkshire’s business. Additionally, Berkshire Hathaway continued to decrease its investment in Chinese electric vehicle maker BYD and sold some Bank of America shares during the quarter.
At the end of the second quarter, Berkshire estimated its remaining Apple holdings to be worth $84.2 billion, down from $135.4 billion at the end of the first quarter. Despite a surge in Apple’s stock price over the summer, Berkshire’s stake in the company has been significantly reduced.
Financial Performance and Operating Income
In terms of financial performance, Berkshire Hathaway reported earnings of $30.348 billion in the second quarter, representing a decrease from $35.912 billion in the same period last year. The company’s continued investments experienced a decline of $28.2 billion in value.
Buffett has consistently advised investors to focus on Berkshire’s operating income when evaluating its performance, as this metric excludes the impact of investment gains and losses. Operating profit rose over 15% to $11.598 billion, or $8,072.16 per Class A share, compared to $10.043 billion, or $6,928.40 per Class A share, a year ago.
Diversified Business Portfolio
Berkshire Hathaway’s business portfolio includes insurance companies, BNSF Railroad, utility companies, and various retail and manufacturing businesses like Dairy Queen and See’s Candy. Despite challenges in some economically sensitive sectors, Geico led an improvement in Berkshire’s overall business performance.
Looking ahead, Berkshire Hathaway continues to navigate the ever-changing landscape of investments and business operations, maintaining a focus on long-term growth and sustainability.
