Berkshire Hathaway beats earnings views, resumes share buybacks

PARAGRAPH 1 --- What happened: Berkshire Hathaway (BRKA, BRKB) reported a 16% year-over-year increase in operating earnings to $13.0 billion in Q2 2022, driven by a $1.2 billion swing in currency effects. Excluding this, earnings grew by about 5%. Notably, the company resumed share buybacks, making nearly $20 billion in net purchases and repurchasing $4.5 billion of its own stock, ending a 14-quarter streak of selling equities.

PARAGRAPH 2 --- Market impact: Berkshire's strong earnings and renewed buyback activity have positively impacted the broader market, with investors seeing it as a vote of confidence in the current economic environment. The move could also influence other companies to resume or increase their buyback programs, potentially boosting market sentiment and stock prices. However, the significant decline in Berkshire's cash hoard may raise concerns about the company's future investment opportunities.

PARAGRAPH 3 --- What to watch next: Investors should monitor Berkshire's Q3 earnings report, scheduled for late October, to see if the company maintains its strong earnings momentum. Additionally, they should watch for any updates on Berkshire's capital allocation plans, including potential acquisitions or further share repurchases, which could signal the company's confidence in the market. Lastly, changes in Berkshire's equity portfolio, particularly any significant new positions or divestments, could provide insights into Warren Buffett's successor, Greg Abel, and his investment strategies.