Warren Buffett surprises by slashing Berkshire Hathaway’s longtime Apple stake in second quarter
OMAHA, Nebraska — Investor Warren Buffett The company posted a $47 billion profit on stock sales in the second quarter, while drastically cutting Berkshire Hathaway’s huge shares Apple Stakebut a decline in the paper value of its other investments caused profits to fall, despite improvements at the company’s numerous businesses.
The biggest news of the quarter was the sale of a large chunk of his Apple shares — Buffett once called the company’s stake in the iPhone maker a pillar of Berkshire’s business that he planned to hold on to indefinitely. Buffett’s other big investment moves in the quarter included continued cuts to his investment in Chinese EV maker BYD and the sale of some of his Bank of America shares.
Berkshire didn’t provide an exact number of Apple shares in Saturday’s report, but estimated the investment was worth $84.2 billion at the end of the second quarter, even though the shares soared to as high as $237.23 over the summer. At the end of the first quarter, Berkshire’s Apple stake was worth $135.4 billion.
Berkshire said it earned $30.348 billion, or $21.122 per Class A share, during the second quarter. That’s down from $35.912 billion, or $24.775 per Class A share, a year ago, when the paper value of its investment portfolio rose $24.2 billion.
This year, the value of the investments Berkshire still holds has fallen by $28.2 billion.
Buffett has long warned investors that it is better to look at operating profits when assessing Berkshire’s performance, because those figures do not include investment gains and losses, which can vary widely from quarter to quarter.
By that measure, Berkshire’s operating profit grew more than 15 percent to $11.598 billion, or $8,072.16 per Class A share, from $10.043 billion, or $6,928.40 per Class A share, a year ago. Geico led the improvement in Berkshire’s businesses, while many of its other businesses that are more exposed to the economy reported disappointing results.
The results far exceeded the $6,530.25 per share earnings forecast by four analysts surveyed by FactSet Research.
Berkshire owns several insurance companies, including the railroad BNSF, several large utilities, and a diverse collection of retail and manufacturing businesses, including brands such as Dairy Queen and See’s Candy.