(Bloomberg) — Warren Buffett is pulling back on some capital-deployment maneuvers he’s favored in the past.
The billionaire’s Berkshire Hathaway Inc. repurchased just $6 billion of shares during the second quarter, short of the $6.6 billion it bought back during the first three months of 2021 and the lowest it’s been since the same period last year, according to the conglomerate’s second-quarter earnings. He also was a net seller of stocks for the third quarter in a row.
That left his cash pile stubbornly high at $144 billion, just slightly below the first quarter. Buffett’s been faced with a high-class problem in recent years: Too much cash, and too few opportunities. He’s struggled to find ways to deploy those funds into higher-returning opportunities and has increasingly turned to buybacks as one option. But Berkshire’s stock, already a challenge because of its lack of liquidity, has rallied in recent months, with the Class A shares gaining 8.5% in the second quarter.
Berkshire profit jumped to $6.7 billion during the period, driven by gains at its manufacturers, service companies and retailers. The company has benefitted as the U.S. economy climbs back from its pandemic lows. Still, it was confronted with higher costs for some materials hitting businesses such as its operations that deal with home building.
Berkshire also felt some pain from higher losses at its auto insurer, Geico. Drivers returning to the road as the U.S. opened up in recent months led to more frequent wrecks, causing underwriting profit at Geico to slump nearly 70% during the second quarter. At another unit, it had to shell out $160 million to help contain and respond to a fire at one of chemical maker Lubrizol’s facilities in Rockton, Illinois in June, it said.
Buffett, who will turn 91 later this month, gave no indications on how he was planning to put his cash pile to work. He also made no mention of any succession plans, after saying in May that Greg Abel was the leading candidate to succeed the chief executive officer.
(Updates with more details from earnings report from second paragraph.)
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