Berkshire Hathaway, under the leadership of Warren Buffett, announced a decrease in second-quarter net earnings compared to the previous year, primarily attributed to a drop in investment gains offsetting gains in operating earnings. The company continued to divest its stake in Apple, Inc. in light of volatile market conditions impacting its investment gains, which decreased significantly by 27.52% during the quarter.
Operating earnings, which reflect income from portfolio companies, experienced a positive growth of 15.48%, reaching $11.60 billion, despite the decline in investment gains. The market turbulence, as seen through the performance of the S&P 500, influenced Berkshire's investment portfolio as the index fluctuated between highs and lows throughout the quarter, ultimately impacting the overall gains from its investments.
Berkshire Hathaway disclosed changes in its portfolio holdings, showcasing a decrease in its core holdings to 72% of total equity holdings compared to the previous quarter. The fair value of equity investments dropped to $284.9 billion, reflecting adjustments made to navigate uncertain economic conditions and address tax liabilities. Additionally, the company's cash reserves surged to $276.94 billion by the end of the quarter, signaling a strategic positioning to weather market uncertainties and take advantage of potential investment opportunities.