5 Highlights of Berkshire’s 2023 Second Quarter Report

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Dr. David Kass
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On Saturday August 5 Berkshire released its 10-Q report for the second quarter of 2023.

Q2 2023 hedge fund letters, conferences and more

Berkshire Archive

These are the highlights:

  1. Berkshire’s operating earnings rose 7%, with insurance up 74%, but railroad down 24%, and energy down 1%. . Berkshire’s operating cash flows in 2023 Q2 ($12.4 billion) were up 46% from 2022 Q2 ($8.5 billion). Geico’s premiums in 2023 reflected rate increases during the past 12 months that produced higher average premiums per auto policy (16.3%), as well as a 2.7 million decrease (14.4%) in policies-in-force over that period. GEICO significantly reduced advertising in 2022 and 2023, which contributed to the reduction in policies-in-force.
  2. Berkshire repurchased $1.4 billion of its shares in Q2 vs. $4.4 billion in Q1, for a total of $5.8 billion in the first half of 2023. It repurchased only about $100 million in Q3 through July 26. It paid an average price of $506,000 per A share and $335 per B share in June 2023.
  3. Berkshire’s cash rose by $17 billion to $147.4 billion at the end of Q2 vs. $130.6 billion at the end of Q1.
  4. Berkshire had net sales of equities of about $8 billion in Q2, with purchases of $4.6 billion and sales of $12.6 billion. It reduced its equity holdings on a cost basis in “Banks, Insurance, and Finance” by $2.2 billion, “Consumer Products” by $4 billion, and “Commercial and Industrial” by $9.6 billion in Q2.
  5. Berkshire reduced its stake in Chevron by 7% to $19.4 billion in Q2.
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David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.