Berkshire Hathaway reported second-quarter earnings on Aug. 5. For that second quarter, which ended on June 30, the company generated total revenue and investment gains of $125.564 billion. Investment and derivative gains improved to $25.869 billion from -$53.038 billion from the year-ago period. For the first six months of the year, these gains came to $53.308 billion. Operating earnings increased 6.7% year over year to $10.043 billion. Over six months, operating earnings came to $18.108 billion.
Total costs and expenses amounted to $80.64 billion, leaving earnings before interest and taxes of $45.435 billion. Over six months those numbers become costs and expenses of $156.727 billion and earnings before interest and taxes of $90.187 billion. After accounting for taxes, company-wide net earnings attributable to shareholders for the period printed at $35.912 billion for the quarter, up from -$43.621 billion for the year-ago comp and at $71.956 billion for the half, up from -$37.537 billion for the same six-months a year ago.
In terms of earnings per share, this comes to $24,775 for the A shares, which is nice, but more importantly $16.52 for the B shares ( BRK.B) vs. a loss per share of $19.78 a year back. For the first half of the year, BRKB has earned $32.77 per share, up from a loss per share of $17.22 a year ago.
Operating earnings by business segment for the first half of 2023:
- Insurance, underwriting produced operating earnings of $2.158 billion (+144.7%).
- Insurance, investment income produced operating earnings of $4.338 billion (+41.1%).
- BNSF produced operating earnings of $2.511 billion (-17.3%).
- Berkshire Hathaway Energy Company produced operating earnings of $1.201 billion (-23.2%).
- Other businesses produced operating earnings of $6.568 billion (+4.7%).
- Non-Controlled Businesses produced operating earnings of $1.103 billion (+137.7%).
- "Other" produced operating earnings of $229 billion (down from $1.282 billion).
Strong Fundamentals
Over the first six months of the fiscal (and calendar) year, Berkshire had driven operating cash flow of $21.127 billion. Over that same period, the firm spent $8.398 billion on property, plant and equipment. That left free cash flow of $12.729 billion. Out of that number, Berkshire repurchased $5.85 billion worth of its own stock. Berkshire does not pay out a cash dividend to shareholders. The cash balance moved either into cash or was used to pay down debt.
Looking over the balance sheet, Berkshire ended the first half with a cash position of $169.73 billion (+10.4%) and equity investments of $353.409 billion (+14.5%). Inventories stood at $25.295 billion (basically flat). This left total assets at $1.041 trillion (+9.8%).
Total liabilities less equity came to $489.812 billion, including $125.347 billion in notes payable and other borrowings. That majority of this debt is tied to the firm's railroad business. Obviously, this balance sheet is quite strong given its debt to cash ratio of 0.74.
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