Gerard Miller | CNBC
Berkshire Hathaway announced on Saturday that it bought back a record amount of its own stock in the second quarter as the coronavirus pandemic affected operations for Warren Buffett's conglomerate.
The company announced it had repurchased $ 5.1 billion of shares in May and June. Berkshire repurchased more than $ 4.6 billion of its Class B shares and approximately $ 486.6 million in Class A shares.
The share buyback is the largest to date for Buffett in a single period, nearly double the $ 2.2 billion the conglomerate bought back in the final quarter of 2019. In fact, the amount is slightly higher than what Buffett spent buying back Berkshire shares throughout 2019.Despite the company's record buybacks last quarter, the Berkshire's cash hoard grew to over $ 140 billion.
Berkshire Class A and Class B stocks fell more than 19% in the first quarter and lagged the S&P 500 by more than 1% in the second.
These buybacks come at a difficult time for some of Berkshire's wholly owned companies as the pandemic has thwarted economic activity in the US and around the world.
Berkshire's operating income declined 10% in the second quarter, falling to $ 5.51 billion from $ 6.14 billion a year ago. The company also took on a fee of approximately $ 10 billion from Precision Castparts, Berkshire's largest business in its manufacturing segment.
Berkshire's investments in public markets increased $ 34.5 billion in the quarter. That gain resulted in net income increasing to $ 26.3 billion from $ 14.1 billion a year ago. However, unrealized gains on investing quarter-to-quarter are volatile, and Buffett himself warns investors not to focus on this total return number.
The company is heavily invested in several companies that have rallied since the stock market bottomed in late March. Apple – Berkshire's largest common stock stake – has nearly doubled since March 23. JPMorgan Chase is up more than 27% over that period, and Amazon is down more than 66%.
Of course, Berkshire cautioned about the uncertainty the ongoing coronavirus pandemic brought to its businesses, stating, "The risks and uncertainties that arise from the pandemic and that could affect our future profits, cash flows and financial condition include the nature and duration of the restriction or closure of our various facilities and the long-term effects on demand for our products and services. "
The company also said Berkshire-owned insurance giant Geico is likely to "negatively" impact its underwriting results from the pandemic for the remainder of 2020 and into the first quarter of next year.
Subscribe to CNBC PRO for exclusive insights and analysis, as well as live business day programs from around the world.
Correction: This story has been updated to reflect Berkshire's operating profit, which has dropped to $ 5.51 billion. In an earlier version of this story, the number was incorrectly stated.