10-QPeriod: Q2 FY2019

BERKSHIRE HATHAWAY INC Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 5, 2019For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. reported strong financial results for the six months ending June 30, 2019, driven by significant investment gains and solid performance across its diverse business segments. Net earnings attributable to Berkshire Hathaway shareholders surged to $35.7 billion, a substantial increase from $10.9 billion in the prior year, largely propelled by investment and derivative gains of $24.0 billion, which included substantial unrealized gains on equity securities. Operating earnings from its insurance, railroad, utilities, manufacturing, service, and retailing businesses remained robust, demonstrating resilience and consistent performance. The company maintained a strong balance sheet with total shareholders' equity reaching $386.4 billion. Cash, cash equivalents, and U.S. Treasury Bills totaled $45.1 billion, underscoring Berkshire's commitment to maintaining ample liquidity. Share repurchases continued, with $2.1 billion in Class A and B shares repurchased in the first six months of 2019, reflecting management's confidence in the company's intrinsic value and commitment to returning capital to shareholders when opportunities arise. The overall financial health and diverse revenue streams position Berkshire Hathaway favorably.

Financial Highlights

29 data points
Beta

Revenue

$63.60B

Net Income

$14.07B

22.1% Net Margin

Total Assets

$760.11B

Cash & Equivalents

$45.10B

Free Cash Flow

$5.59B

Financial Statements
Beta
Revenue$63.60B
Operating Expenses$56.01B
Net Income$14.07B

Key Highlights

  • 1Net earnings attributable to Berkshire Hathaway shareholders significantly increased to $35.7 billion for the first six months of 2019, up from $10.9 billion in the same period of 2018.
  • 2Investment and derivative gains were a major driver, totaling $24.0 billion in the first six months of 2019, primarily due to unrealized gains on equity securities.
  • 3Total shareholders' equity grew to $386.4 billion as of June 30, 2019, reflecting strong profitability and capital accumulation.
  • 4Cash, cash equivalents, and U.S. Treasury Bills remained substantial at $45.1 billion, ensuring significant liquidity.
  • 5The company repurchased $2.1 billion of its Class A and Class B common stock in the first six months of 2019.
  • 6Insurance underwriting, railroad, utilities, manufacturing, service, and retailing segments all contributed positively to earnings, showcasing the diversified strength of Berkshire's operations.

Frequently Asked Questions

The primary driver of the significant increase in net earnings was the substantial investment and derivative gains, which amounted to $24.0 billion for the first six months of 2019. This was largely attributed to unrealized gains from market price increases in Berkshire's equity security holdings.

For the first six months of 2019, insurance underwriting contributed $742 million in net earnings, while insurance investment income was $2.6 billion. While underwriting profits were lower compared to the prior year due to fewer favorable prior year loss reserve adjustments, investment income saw a notable increase driven by higher interest rates and increased dividend income.

Berkshire Hathaway maintained a strong liquidity position, with cash, cash equivalents, and U.S. Treasury Bills totaling $45.1 billion as of June 30, 2019. This reflects the company's commitment to maintaining ample financial resources.

Yes, Berkshire Hathaway repurchased $2.1 billion of its Class A and Class B common stock during the first six months of 2019. This aligns with the company's policy to repurchase shares when management believes the repurchase price is below intrinsic value, provided liquidity remains strong.