Berkshire has been a seller of stocks for seven quarters straight, but that selling accelerated in the last period with Buffett shedding more than $75 billion in equities in the second quarter. That brings the total of stocks sold in the first half of 2024 to more than $90 billion. The selling by Buffett has continued in the third quarter in some areas with Berkshire trimming its second biggest stake, Bank of America, for 12 consecutive days, filing this week showed.
For the second quarter, Berkshire’s operating earnings, which encompass profits from the conglomerate’s fully-owned businesses, enjoyed a jump thanks to the strength in auto insurer Geico. Operating earnings totaled $11.6 billion in the second quarter, up about 15% from $10 billion a year prior.
Buffett, who turns 94 at the end of the month, confessed at Berkshire’s annual meeting in May that he is willing to deploy capital, but high prices give him pause.
“We’d love to spend it, but we won’t spend it unless we think [a business is] doing something that has very little risk and can make us a lot of money,” the investment icon said at the time. “It isn’t like I’ve got a hunger strike or something like that going on. It’s just that … things aren’t attractive.”
The S&P 500 has surged the last two years to record levels as investors bet the Federal Reserve would lower inflation with higher interest rates, while avoiding an economic recession. So far, that has played out with the S&P 500 up 12% in 2024. However, concerns about a slowing economy have been awakened recently by some weak data, including Friday’s disappointing July jobs report. The Dow Jones Industrial average lost 600 points on Friday. Investors have also recently grown concerned about the valuations in the technology sector, which has led the bull market because of optimism surrounding artificial intelligence innovation.
Geico boosts earnings
Geico, the company Buffett once called his “favorite child,” registered nearly $1.8 billion in underwriting earnings before taxes in the second quarter, more than tripling the level of $514 million from a year ago.
Profit from BNSF Railway came in at $1.6 billion, in line with last year’s number. Berkshire Hathaway Energy utility business saw earnings fall to $326 million, nearly half of the $624 million from the same quarter a year ago. BHE continues to face pressure for possible wildfire liability.
Berkshire Hathaway ‘A’ shares, year-to-date
Berkshire’s net earnings, which includes short-term investment gains or losses, declined to $30.3 billion in the second quarter from $35.9 billion in the same period a year ago. Buffett cautions investors to not pay attention to quarterly fluctuations in unrealized gains on investments, which can be “extremely misleading.”
Check out the companies making headlines in after-hours trading: Netflix — The streaming stock popped more than 4% after third-quarter earnings topped expectations. Netflix earned $5.40 per share on $9.83 billion in revenue, while analysts forecast $5.12 a share and $9.77 billion in revenue. The company also said its ad-tier memberships jumped 35% quarter over quarter. Intuitive Surgical — Shares jumped about 5% after the maker of the da Vinci surgical robot posted better-than-expected third-quarter results. Intuitive Surgical earned $1.84 per share on $2.04 billion in revenue. Analysts surveyed by LSEG had estimated earnings of $1.63 per share on $2 billion in revenue. WD-40 — The maintenance product maker’s shares dropped more than 4% after a disappointing fiscal fourth-quarter earnings report. The company earned $1.23 per share, and said it expects fiscal 2025 profits of between $5.20 and $5.45 per share. OceanFirst Financial — Shares advanced 2.8% after OceanFirst announced that it earned 39 cents per share in the third quarter, a penny above the consensus estimates from FactSet. On the other hand, net interest income and net interest margin both came in lower than forecast. MGP Ingredients — The spirits and food ingredient maker’s stock tumbled nearly 20% after the company warned of disappointing third-quarter results and lowered its full year guidance. CEO David Bratcher said its performance was hurt by weak alcohol trends and elevated whiskey inventories. Marten Transport — Shares of the trucking company slid almost 3% after third-quarter earnings came in lower than analysts anticipated. Revenue and operating income were also lower than the forecasts from three analysts polled by FactSet. Supernus Pharmaceuticals — Shares popped as much as 5% after Supernus Pharmaceuticals announced results from a Phase 2a study of an antidepressant therapy that showed a “rapid and substantial decrease” in depressive symptoms. — CNBC’s Hakyung Kim and Sarah Min contributed reporting.
Check out the companies making the biggest moves midday: Taiwan Semiconductor — Shares surged 12% after the company, which is the world’s largest producer of advanced chips, reported a 54% gain in net profit for the third quarter driven by strong AI-related demand. Shares of chip giants Nvidia and Micron each rose about 3% in sympathy following the quarterly results. Nvidia — The AI-darling was up nearly 3% after hitting a record high earlier in the trading session. Taiwan Semiconductor, which is rallying on its earnings report, is a major Nvidia supplier. Expedia , Uber — Shares of the companies moved in opposite directions following a Financial Times report, which cited people familiar with the process, that Uber explored a potential takeover bid for Expedia. The paper said Uber’s interest in the online travel company was at a “very early stage.” Following the report, Expedia rose more than 3%, while Uber fell more than 2%. Elevance Health — The health insurer dropped 12% after reporting a profit of $8.37 per share for the third quarter, excluding items, while analysts polled by LSEG anticipated $9.66 a share. The company cited “unprecedented challenges” in the Medicaid business. However, Elevance saw $44.72 billion in revenue, above the consensus forecast of $43.37 billion. Travelers — Shares jumped 7.6% after the insurance company posted a big earnings beat before the bell. Travelers’ third-quarter earnings came in at $5.24 per share, topping the $3.55 a share expected from analysts polled by LSEG. However, revenue missed estimates. Lucid Group — The electric vehicle maker tumbled 15% after the company announced a public offering of almost 262.5 million shares of its common stock to raise $1.67 billion. Blackstone — The stock rallied nearly 7% on the back of the alternative asset managers’ financial report. Blackstone reported third-quarter earnings of $1.01 per share on revenue of $2.43 billion. Analysts polled by LSEG had expected EPS of 92 cents on revenue of $2.41 billion. CSX — Shares slipped 5.9% after the transportation company reported disappointing third-quarter results. CSX’s earnings were 46 cents per share on revenue of $3.62 billion. That’s below the consensus estimate of 48 cents per share and $3.67 billion in revenue, per LSEG. Nokia — U.S.-listed shares of the Finnish telecommunications giant fell 3% after the company posted an 8% dip in third quarter sales due to a slowdown in the Indian market. However, its quarterly profit increased 22%. Alcoa — The aluminum producer’s stock shed more than 3% after the company reported third-quarter revenue of $2.90 billion, below the $2.97 billion LSEG consensus estimate. However, its adjusted earnings of 57 cents per share topped the 28 cents a share expected from analysts. Equifax — Shares fell 2.6% after the company’s guidance fell short of expectations. Equifax expects fourth-quarter adjusted earnings per share between $2.08 and $2.18, versus the $2.20 a share estimate from analysts polled by FactSet. The company guided for full-year adjusted EPS between $7.25 and $7.35, short of the $7.36 consensus estimate. Revenue for both the fourth quarter and full year also came in below expectations. Steel Dynamics — The stock gained nearly 5% after the steel producer beat earnings and revenue expectations for the third quarter. For the period, Steel Dynamics posted earnings of $2.05 per share on $4.34 billion in revenue, above the $1.97 per share on $4.18 in revenue that analysts were expecting, according to LSEG. Looking toward 2025, the company said it expects steel pricing to recover. Synovus Financial — Shares popped 5% after the company reported better-than-expected adjusted earnings per share for the third quarter. Synovus also guided for fourth-quarter adjusted revenue of $560 million to $575 million, above the $558 million expected from analysts polled by FactSet. Walgreens Boots Alliance — The stock dropped about 5%, paring some of the 15.8% it gained in the prior session and now on pace for its worst day since Aug 27. On Wednesday, Walgreens reported a fourth-quarter earnings beat and said it plans to close about 1,200 stores over the next three years. — CNBC’s Sean Conlon, Hakyung Kim, Alex Harring and Pia Singh contributed reporting.
Check out the companies making headlines before the bell. Elevance Health – Shares plummeted more than 10% after the health insurer reported weaker-than-expected third-quarter earnings. In a statement , CEO Gail Boudreaux said the company remains “confident” amid “unprecedented challenges in the Medicaid business.” Health care stocks Molina Healthcare and Centene also fell nearly 9% and more than 7%, respectively. Taiwan Semiconductor – The stock surged more than 8% after the company reported a 54% gain in net profit for the third quarter. Shares of chip giant Nvidia – one of TSMC’s clients – rose more than 3% in sympathy following the quarterly results. Expedia – Shares jumped nearly 5% after The Financial Times reported, citing people familiar with the process, that Uber explored a potential takeover bid for the online travel company. According to Financial Times sources, Uber’s interest in Expedia was at an “early stage.” Uber shares fell more than 2%. Lucid Group – The stock tumbled 18% after the electric vehicle maker announced a public offering of nearly 262.5 million shares of its common stock. Lucid also said its majority stockholder, Saudi Arabia’s Public Investment Fund affiliate Ayar Third Investment, will purchase more than 374.7 million shares of its common stock. Nokia – Shares slid more than 5% after the company reported an 8% dip in sales for the third quarter, citing a slowdown in the Indian market. Nokia’s profit for the period, however, increased 22%. Looking ahead, CEO Pekka Lundmark said in a statement that he expects full-year profit to come in “within the bottom-half” of its guidance range. CSX – The transportation stock fell more than 4% following the company’s weaker-than-expected quarterly results. For the third quarter, CSX posted earnings of 46 cents per share on revenue of $3.62 billion. That’s below the 48 cents per share and $3.67 billion in revenue that analysts were expecting, per LSEG. Alcoa – Shares rallied nearly 7% following the aluminum producer’s earnings beat. Alcoa reported third-quarter adjusted earnings of 57 cents per share, versus the 28 cents a share expected from analysts polled by LSEG. However, revenue came in at $2.90 billion, below the $2.97 billion consensus estimate. Kinder Morgan – The energy infrastructure stock slipped 2.1% after third-quarter earnings missed analyst expectations. Kinder Morgan posted adjusted earnings per share of 25 cents on $3.70 billion in revenue. Analysts polled by LSEG had forecasted 27 cents a share and $3.98 billion, respectively. — CNBC’s Alex Harring and Michelle Fox Theobald contributed reporting.