Berkshire Hathaway Reports 59% Drop in Quarterly Earnings
According to Reuters estimates, Berkshire Hathaway has nearly tripled its cash or cash-equivalent reserves.
Quick overview
- Berkshire Hathaway has reduced its equity exposure for the 11th consecutive quarter, including a notable $3.8 billion sale of Kraft Heinz shares.
- The sale comes amid Kraft Heinz's struggles with inflation and changing consumer preferences, raising speculation about a potential breakup of the company.
- Berkshire's cash reserves have nearly tripled to $344 billion, reflecting Warren Buffett's conservative investment strategy as he prepares for retirement.
- Investors are closely monitoring upcoming U.S. economic data and trade tensions, particularly regarding potential tariffs from the Trump administration.
For the 11th consecutive quarter, Berkshire Hathaway has reduced its equity exposure. The company also disclosed a $3.8 billion sale of Kraft Heinz shares, marking nearly three years of steady cash accumulation and divestment from major holdings.
The sale of Kraft Heinz is particularly notable, as the company has been struggling with inflation and shifting consumer preferences. Kraft Heinz had long been a key holding for Berkshire Hathaway.
Speculation is now mounting over a possible breakup of Kraft Heinz, despite its merger just a decade ago — a move orchestrated in part by Berkshire, which remains its largest shareholder.
Warren Buffett’s Tactical Shifts
According to Reuters estimates, Berkshire Hathaway has nearly tripled its cash or cash-equivalent reserves, from $128 billion at the end of 2022 to $344 billion in the second quarter of this year.
Buffett’s strategy has long focused on conservative investments in well-established companies with strong business models. Berkshire’s total assets now stand at $1.16 trillion — just shy of Turkey’s GDP — and control of the firm is set to pass to Greg Abel in six months, following Buffett’s announcement of his final retirement.
Despite the company’s more cautious posture, Wall Street continues to closely track Berkshire’s moves. The firm maintains major stakes in leading companies across sectors, including Apple, American Express, Coca-Cola, Chevron, and Bank of America.
Investors Eye Key U.S. Economic Data Ahead of Fed Decision
All eyes are now on upcoming U.S. jobs and inflation data for August, which could shape the Federal Reserve’s stance at its September 17 meeting. Any signals of monetary easing would be welcomed by investors and could support risk assets, including cryptocurrencies.
According to Bloomberg, SOFR rate options — a key tool for gauging Fed policy expectations — are already pricing in potential rate cuts at each of the three remaining meetings in 2025, totaling up to 75 basis points.
Trade Tensions Resurface
Meanwhile, trade uncertainty lingers. On Monday, President Donald Trump threatened to impose a 35% tariff on imports from the European Union unless the bloc commits to a $600 billion investment in the United States — a follow-up to the agreement reached in late July. Last week, Brussels had temporarily paused its retaliatory measures.
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