Berkshire Hathaway Earnings: Cash Balances Retreat on Increased Investments and Share Buybacks in Q2

Key Morningstar Metrics for Berkshire Hathaway

• Fair Value Estimate
  : USD 765,000
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Low

What We Thought of Berkshire Hathaway’s Earnings

Berkshire Hathaway BRK.A reported adjusted second-quarter operating results slightly better than our expectations, with the firm continuing to benefit from solid underwriting in its insurance businesses despite pricing coming down over the past year.

Why it matters: Berkshire has historically offset underperformance in one or more of its segments with outperformance in others.

• Following several years of outstanding results, the insurance operations have seen pricing come down over the past year, but with no discernible catastrophe losses in the second quarter, underwriting results were still solid.
• BNSF continues to trail Union Pacific on the profitability front, despite seeing another improvement in its operating ratio, with the gap in profitability between the two firms at just over 500 basis points on a preliminary basis in the second quarter.
• Berkshire Hathaway Energy, meanwhile, produced steady results during the second quarter, but future results could still be adversely affected by wildfire litigation and legislation that has curbed investments in renewables.
• The manufacturing, service, and retailing division generated decent revenue growth during the second quarter, aided by the closing of the OxyChem acquisition at the beginning of the year, with margins improving year over year.

The bottom line: With Berkshire’s second-quarter results coming in slightly above our expectations, we’re likely to slightly increase our USD 765,000 per Class A share and USD 510 per Class B fair value estimates.

• Excluding the impact of investment gains/losses and other adjustments, second-quarter adjusted operating revenue increased 10.0% year over year to USD 101.8 billion. Adjusted operating earnings rose 16.3% year over year to USD 13.0 billion.
• Book value per share, which serves as a decent proxy for measuring changes in Berkshire’s intrinsic value, increased 12.5% year over year to USD 522,396 from USD 464,454 at the end of June 2025.