Berkshire Hathaway’s after-tax operating earnings increased 16.3% in the second quarter of 2026 to $12.98 billion from $11.16 billion a year earlier, as gains across several of the conglomerate’s noninsurance businesses outweighed declines in insurance underwriting and investment income. The Omaha, Nebraska-based company also stepped up repurchases of its own shares, deploying approximately $4.5 billion during the quarter after spending only $235 million in the first three months of the year. The combination of stronger operating results and faster capital deployment offered investors an early view of Berkshire under Chief Executive Greg Abel, who took over the top executive position from Warren Buffett in January. Buffett remains chairman and is consulted on repurchase decisions under the company’s stated policy.

The operating result was equivalent to roughly $9,050 per Class A share and reflected strength at BNSF Railway, Berkshire Hathaway Energy and the collection of manufacturing, service and retailing subsidiaries. Operating revenue across Berkshire’s businesses reached approximately $101.8 billion, up about 10% from $92.5 billion in the year-earlier quarter. The company’s diverse holdings include freight rail, electric utilities, industrial manufacturing, chemicals, aviation services, auto retailing, consumer products and insurance. That breadth makes operating earnings a closely watched measure of activity across the U.S. economy, although Berkshire’s changing business mix and acquisitions can complicate direct year-over-year comparisons.

Foreign-currency movements contributed materially to the headline increase. Berkshire recorded $326 million of after-tax foreign-exchange gains tied principally to the revaluation of non-U.S.-dollar borrowings, compared with an $877 million loss in the second quarter of 2025. The year-over-year swing added about $1.2 billion to the “other” earnings category. Excluding that currency effect, operating earnings growth was approximately 6%, according to calculations cited by Barron’s. The distinction is significant because exchange-rate gains and losses can reverse rapidly and do not necessarily indicate changes in the economics of Berkshire’s controlled businesses.

Manufacturing, service and retailing operations delivered the largest increase among Berkshire’s main operating groups. After-tax earnings rose 24.1% to $4.47 billion from $3.60 billion. The service group benefited from stronger results at electronics distributor TTI and Berkshire’s aviation businesses, including NetJets and FlightSafety. Service revenue increased 21.1% to $6.87 billion, while pre-tax service earnings climbed 20.6% to $879 million. Berkshire said TTI benefited from accelerating customer demand, currency translation and inventory-cost-based price increases. Some customers accelerated orders in response to possible price increases and concerns about longer supply-chain lead times, creating a risk that part of the demand was pulled forward.

Industrial subsidiaries also recorded substantial gains. Precision Castparts generated second-quarter revenue of $3.1 billion, up 14.4%, as demand and pricing increased for aerospace and industrial gas-turbine products. Its pre-tax earnings rose 34.2%, helped by higher sales, improved manufacturing efficiency and a more favorable product mix. Lubrizol’s revenue increased 11.1% to $1.8 billion, while pre-tax profit advanced 23.4% despite higher raw-material and manufacturing costs. IMC, Berkshire’s metalworking-products business, reported a 26.5% revenue increase and a 71% jump in pre-tax earnings. Berkshire cautioned that rising raw-material costs are expected to pressure IMC’s earnings during the second half.

BNSF Railway’s net earnings rose 6.3% to $1.56 billion from $1.47 billion. Railroad operating revenue increased 14.6% to $6.56 billion, supported by a 6.5% rise in freight volume and a 7.6% increase in average revenue per car or unit. Consumer-products shipments benefited from higher West Coast imports, market-share gains and tighter trucking capacity, while agricultural and energy volumes rose on stronger grain exports and increased shipments of petroleum fuels, oilseeds and meals. Coal volume declined 7.9%. BNSF’s pre-tax earnings increased 13.9%, but a higher effective tax rate limited the improvement in net income.

Berkshire Hathaway Energy generated $891 million of earnings attributable to Berkshire shareholders, up 26.9% from $702 million. Earnings at U.S. utilities rose 37.6% to $597 million, supported by higher electric margins and production tax credits, while natural-gas pipeline earnings advanced 32.2% to $242 million. Higher customer usage, rate increases in certain territories and lower thermal-generation costs aided the utility businesses. Those gains were partly offset by higher interest expense, maintenance spending and wildfire-prevention costs. Earnings from other energy businesses declined, and the real-estate brokerage operation recorded lower profit following settlement-related charges.

Insurance, historically the engine that supplies Berkshire with investable float, was the principal area of weakness. After-tax underwriting earnings declined 13.1% to $1.73 billion from $1.99 billion. Geico’s pre-tax underwriting profit fell 45.4% to $994 million from $1.82 billion even as earned premiums increased 2.1%. The auto insurer’s loss ratio rose 4.8 percentage points to 76.6%, reflecting higher claims frequency and average severity. Underwriting expenses also increased, driven mainly by commissions and advertising. Geico’s total losses and expenses equaled 91.2% of earned premiums, up from 83.5% a year earlier.

Other insurance units partly cushioned the Geico decline. Berkshire Hathaway Primary Group produced $273 million of pre-tax underwriting profit, up from $63 million, while Berkshire Hathaway Reinsurance Group’s profit increased to $913 million from $650 million. Property-and-casualty reinsurance results benefited from lower losses and favorable prior-year reserve development. A new 10-year quota-share agreement involving insurance subsidiaries of Tokio Marine contributed $483 million of written premiums. Berkshire reported no losses from significant catastrophe events during the first half, although management emphasized that underwriting results can vary substantially with the timing and severity of large disasters.

Insurance investment income also weakened. After-tax investment income fell 9.1% to $3.06 billion from $3.37 billion, as pre-tax interest and other investment income declined 12.8%. Berkshire attributed the decrease primarily to lower short-term interest rates and changes in the balance of Treasury-bill holdings at insurance subsidiaries. Dividend income was little changed. The reduction illustrates a prospective earnings headwind for Berkshire if yields on its vast holdings of short-duration government securities continue to fall, even as the company retains more liquidity than almost any other publicly traded U.S. corporation.

Reported net income, which includes changes in the market value of Berkshire’s stock portfolio, rose to $25.67 billion from $12.37 billion. The quarter included $12.68 billion of after-tax investment gains, compared with $4.97 billion a year earlier. Pre-tax investment gains totaled $16.08 billion, mostly reflecting unrealized appreciation on securities held at the end of June. The year-earlier result also included a $3.76 billion after-tax impairment charge related to Kraft Heinz. Berkshire has repeatedly warned that investment gains and losses can create large, economically misleading swings in quarterly net income and has encouraged investors to focus more heavily on operating performance.

The more strategically significant development was Berkshire’s renewed use of its balance sheet. The company bought approximately $4.5 billion of Class A and Class B shares during the second quarter, with most purchases occurring in June. Regulatory disclosures show that Berkshire acquired 413 Class A shares during June at an average price of about $733,775 and roughly 7.14 million Class B shares at an average price near $487.98. It also repurchased shares in May. Barron’s reported that Berkshire purchased another approximately $3.4 billion of its stock through late July, indicating that the accelerated pace continued after the quarter ended.

Berkshire’s repurchase policy has no fixed authorization, expiration date or minimum purchase commitment. Shares may be bought when Abel, after consultation with Buffett as chairman, determines that the price is below Berkshire’s intrinsic value on a conservative basis. Repurchases cannot reduce consolidated cash, cash equivalents and U.S. Treasury bills below $30 billion. The program therefore serves as both a capital-return mechanism and a valuation signal. The second-quarter purchases were notable because Berkshire completed no buybacks during 2025, when Buffett frequently said market prices offered limited opportunities.

The company also shifted from being a persistent seller of equities to a net buyer. Berkshire purchased more than $20 billion of stocks on a net basis during the quarter, ending a multiyear period in which portfolio sales repeatedly exceeded purchases. Reports on the results identified a $10 billion investment in Alphabet among the deployments, while full details of Berkshire’s listed U.S. equity holdings are expected in its next Form 13F filing. The shift does not eliminate Berkshire’s conservative posture, but it shows that Abel is willing to commit significant sums when he judges expected returns to be attractive.

Acquisitions absorbed additional cash. Berkshire paid approximately $9.4 billion for OxyChem on Jan. 2, bringing Occidental Petroleum’s chemical business into its manufacturing group. After the quarter ended, Berkshire completed its acquisition of home builder Taylor Morrison on July 24 for approximately $6.8 billion in cash, according to the quarterly filing. Those transactions, share repurchases and equity purchases demonstrate several channels through which management can deploy capital. They also broaden Berkshire’s exposure to chemicals and housing, two cyclical sectors whose results will be sensitive to commodity prices, construction demand and interest rates.

Berkshire nevertheless ended June with extraordinary financial capacity. Its insurance and other businesses held $359.2 billion in cash, cash equivalents and Treasury bills, net of unsettled purchase obligations. Broader measures cited in earnings coverage placed total cash holdings at about $365.5 billion, down from levels near $400 billion earlier in the year. Shareholders’ equity reached $747.9 billion, an increase of $30.5 billion from the end of 2025. The balance sheet gives Abel substantial flexibility to fund acquisitions, support insurance obligations and repurchase shares without compromising Berkshire’s emphasis on liquidity.

The quarter also highlights a valuation tradeoff. Buying Berkshire shares below estimated intrinsic value increases the ownership percentage of continuing shareholders, but the benefit depends on management’s appraisal being correct. The reported continuation of repurchases into July suggests Abel and Buffett viewed the shares as sufficiently discounted even after the second-quarter purchases. For investors who had questioned whether Berkshire’s cash stockpile had become structurally excessive, the activity may represent a welcome change. For others, the scale of remaining liquidity underscores how difficult it remains to deploy capital at rates that can materially affect a company of Berkshire’s size.

Analyst reaction centered on the breadth of operating improvement and the change in capital allocation. The 16% headline earnings increase exceeded the pace implied by many underlying businesses, but even after removing the favorable currency comparison, Berkshire produced growth across rail, utilities, industrial manufacturing and services. The principal concern was Geico, where rising claims costs and advertising spending compressed underwriting profitability after a period of exceptionally strong margins. Lower short-term rates also reduce the earnings contribution from cash while potentially raising the relative appeal of equities, acquisitions and buybacks.

Abel’s first year as chief executive remains an early test rather than a definitive break with Berkshire’s past. The repurchase framework still calls for consultation with Buffett, and the company continues to maintain a cash floor far above ordinary corporate requirements. Yet the second quarter marked a visible change in tempo: Berkshire bought more securities, repurchased substantially more of its own shares and completed or prepared major acquisitions while its operating subsidiaries generated nearly $13 billion of quarterly earnings. Future results will show whether the deployment represents a sustained policy shift or an opportunistic response to a limited set of investments.

For the remainder of 2026, investors will focus on Geico’s loss trends, the durability of demand at industrial and service subsidiaries, BNSF freight volumes, utility costs and the integration of OxyChem and Taylor Morrison. Portfolio disclosures will provide additional detail about Berkshire’s equity purchases, while subsequent repurchase data will show whether management continues to regard the shares as undervalued. The central message from the quarter is that Berkshire’s earnings base remains resilient and its financial capacity remains immense, but Abel has begun using that capacity more actively than the company did during the final years of Buffett’s tenure as chief executive.