Six months after Warren Buffett stepped down as CEO, Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) investors will focus beyond quarterly earnings to see whether CEO Greg Abel is beginning to reshape the conglomerate’s capital allocation strategy, with share buybacks expected to be one of the most closely watched metrics.
Buybacks Could Be the Biggest Surprise
According to estimates by Barron’s, Berkshire may have repurchased between $5 billion and $11 billion of its own stock during the second quarter, a sharp increase from the $234.2 million spent in the first quarter, when the company resumed buybacks for the first time since May 2024.
This comes as Berkshire shares have gained about 5.59% this year, trailing the S&P 500’s roughly 12.42% return.
Berkshire will report its second-quarter earnings on Saturday, Aug. 8.
Greg Abel’s Capital Allocation Strategy Faces Fresh Scrutiny
The company ended the first quarter with a record $397 billion in cash and equivalents before investing $10 billion in Google parent Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and completing its $8.5 billion acquisition of Taylor Morrison Home Corp. (NYSE:TMHC).
Berkshire also initiated positions in Delta Air Lines Inc. (NYSE:DAL) and Macy’s Inc. (NYSE:M), while also exiting more than 15 holdings.
Freedom Capital Markets Chief Market Strategist Jay Woods previously told Benzinga those moves showed Abel broadening Berkshire’s investment approach and acting more quickly on opportunities than Buffett typically did.
Wall Street Expects Softer Earnings
Wall Street expects Berkshire to report second-quarter earnings of about $7,553 per Class A share and roughly $5 per Class B share, according to FactSet cited by Barron’s, representing a decline of about 3% from a year earlier.
In the first quarter, net earnings rose to $7,027 per Class A share and $4.68 per Class B share, compared with $3,200 and $2.13, respectively, in the year-ago period.
How have shares performed?
Berkshire’s Class A shares are up 5.63% year to date and 12.29% over the past year. Class B shares have gained 5.59% year to date and 13.68% over the past 12 months.
Price Action: Class B shares closed 1.11% higher on Thursday at $524.61 and gained 0.71% in early pre-market trading on Friday.
Benzinga edge rankings indicate BRK-B has a Momentum score in the 52nd percentile and a Growth score in the 91st percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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