- Berkshire's cash reserves declined significantly for the first time since early 2022 in Greg Abel's second quarter as CEO.
- Berkshire spent $4.5 billion on share buybacks in Q2, which was below the low end of the $5 billion to $11 billion range and less than UBS analyst Brian Meredith's estimate.
- The Q2 buybacks were significantly more than the $235 million spent in Q1, which was the first buybacks since 2024.
- Analysts reacted positively, with CFRA's Cathy Seifert stating, "People are going to be encouraged by the buybacks. It's also Greg's way of taking the helm and asserting himself." Gabelli's Macrae Sykes added, "Material repurchases provide confidence for shareholders that some of the best corporate capital allocators see current value."
- Berkshire may have spent another $3.4 billion on buybacks in July, based on share count comparisons.
- Berkshire is set to release its Q2 portfolio snapshot in the coming week, revealing exact details of its buying and selling.
Greg Abel's leadership at Berkshire Hathaway is marked by significant financial maneuvers in Q2 2023. The company's cash reserves fell to $365.5 billion, an 8% decline from a record high of $397.4 billion in March. This marks the first cash reduction since early 2022.
Berkshire's cash, excluding BNSF's cash and adjusted for Treasury bills, decreased 3.8% to $359.2 billion. A notable part of this spending included $4.5 billion in share buybacks, which, while below the expected range of $5 billion to $11 billion, is a significant increase from the $235 million spent in Q1, the first buyback since 2024.234
Analysts view these buybacks positively. CFRA Research's Cathy Seifert stated, “People are going to be encouraged by the buybacks. It's also Greg's way of taking the helm and asserting himself.” Gabelli Funds' Macrae Sykes added, “Material repurchases provide confidence for shareholders that some of the best corporate capital allocators see current value.”
Additionally, Berkshire made a net purchase of $20 billion in equities, reversing a trend of being a net seller for the past 14 quarters. The company is expected to reveal more details about its buying and selling activities in its upcoming Q2 portfolio snapshot.
“The $4.5 billion in buybacks exceeded the $235 million spent in Q1, which was the first repurchase since 2024. Analysts like CFRA's Cathy Seifert see it as Abel's way of taking the helm, and July may have added another $3.4 billion.”
CNBC
