Warren Buffett's Berkshire Hathaway Inc. posted gains in operating profit as strength in its insurance businesses helped counter inflationary pressures that have weighed on the sprawling conglomerate in the last year.
The firm reported $10.04 billion of operating profit for the second quarter, surpassing its $9.28 billion haul from the same period last year.
The results were largely driven by a 74% increase in insurance underwriting earnings to $1.25 billion, as it trimmed expenses at auto insurer Geico and benefited from its acquisition of underwriter Alleghany Corp.
Berkshire posted stronger results despite Buffett cautioning at its annual meeting in Omaha in May that earnings at the majority of its operating units could fall this year as an "incredible period" for the U.S. economy draws to the end.
Still, the Federal Reserve's aggressive pace of rate hikes has helped the firm reap greater yield on the cash it stockpiles primarily in short-dated U.S. Treasurys. That cash hoard reached $147.4 billion in the quarter, the second-highest level in data going back to 2014.
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On Thursday, Buffett said that Fitch Ratings' downgrade of U.S. government debt wouldn't diminish his appetite for it.
Berkshire's cash pile included $120.4 billion invested in U.S. Treasury bills, according to a company filing on Saturday.
Railroads, Auto Insurance
One business that performed worse was its railroad unit BNSF, where profit fell 24% as freight volumes dipped and an increase in headcount and wage inflation contributed to higher costs for compensation and benefits.
The company's Geico insurance unit, which struggled with unprofitability throughout 2022, posted positive results for the second quarter in a row.
