Anyone that knows anything about Berkshire Hathaway (NYSE: BRK. A) (BRK.B 0.47%) understands that it's unlike any other company. It's one part conglomerate, one part mutual fund, and one part private equity outfit. That's why the business updates it posts every quarter aren't quite as closely watched as those of more conventional companies -- they just don't mean as much, since they're not exactly snapshots of its operations.
Still, investors thinking about taking on a position in Berkshire Hathaway might want to do so before the end of June. Although its second-quarter earnings report due sometime in early July won't technically mean any more than it usually does, this particular report could prove particularly catalytic -- in a bullish way. Here's why.
Riding the rising tide is a direct benefit
The image below is a snapshot from the first page of Berkshire's first-quarter earnings report...a document that's typically only two pages long. The reported investment gains reflect the (mostly unrealized) gains or losses stemming from the rise or fall of the stocks held by the conglomerate. Operating earnings, on the other hand, come from the net cash produced by the company's privately held businesses like Dairy Queen, railroad BNSF, and insurer Geico during the three-month stretch in question. Note that even Berkshire Hathaway itself believes the reported investment gains or losses mean very little in any single quarter. Buffett and his lieutenants truly are thinking much longer term.
Image source: Berkshire Hathaway Q1-2025 report.
And yet, there's a good chance the market just might respond to the upcoming Q2 release...for direct as well as indirect reasons.
Directly, Berkshire's second-quarter report could indicate the restoration of the operating earnings that took a sizable dip during the first quarter of 2025, when payouts linked to California's wildfires led to a near-halving of the company's insurance-underwriting profits...
Image source: Berkshire Hathaway Q1-2025 report.
...not that Berkshire is exactly cash-strapped (as of the most recent look, it's sitting on $278 billion in cash), but having access to as much reliable liquidity as you could ever need or want is never a bad thing. A bounce-back in operating earnings could provide some much-needed reassurance to investors starting to wonder if the company's cash cows are drying up on a more permanent basis.
The other direct reason Berkshire's upcoming quarterly report may well be bullish is the obvious one. That is, after a stumble during Q1, rekindled investment gains would assure shareholders that Buffett and his team are still sitting on all the right stocks in all the right proportions.
And investment gains are likely. The recent reduction in sizable stakes in Bank of America and Capital One Financial both would have happened at prices above Q1's closing prices. In the meantime, although the recent purchase of shares of Pool Corp., Constellation Brands, and Domino's Pizza established or added stakes in stocks that remain relatively lethargic, the market itself is now above March's final levels. This should help boost Berkshire Hathaway's second-quarter investment gains, realized or unrealized.
There's an indirect, intangible benefit, too
That's the potential direct upside for Berkshire Hathaway shareholders stemming from the company's upcoming quarterly report. Yet there's a less direct, more philosophical reason the results due sometime early in the coming month could also be bullish.
And it's got everything to do with the buzz currently surrounding the company.
Cutting to the chase, Warren Buffett is stepping down from his role as CEO of Berkshire Hathaway. He'll be replaced by Greg Abel at the beginning of the coming year. It will be the first time in 55 years the Oracle of Omaha won't be at the helm, prompting at least a little bit of worry from more than a few investors. After all, we're on the verge of finding out just how much of Berkshire's market-beating success is its own, and how much of it is attributable to Buffett's brilliant mind.
Image source: The Motley Fool.
There's something else happening here, however, that's not been particularly well noticed by the market just yet. That is, it looks like Warren Buffett may be cleaning up some last-minute matters before taking the offramp. Long-term stocks in Bank of America, Capital One, and Citigroup have actually been pared back for a few quarters now. He's also finally let go of hit-and-miss beauty retailer Ulta Beauty as well as several other positions of insignificant size.
Then there's Kraft Heinz, which Berkshire's been sitting on since Buffett helped orchestrate the merger of Kraft and Heinz back in 2015, but has underperformed -- significantly -- since 2017.
NASDAQ: KHC
Key Data Points
While Berkshire Hathaway has neither confirmed nor denied it (not that it would confirm it until after the fact), there are credible whispers now circulating that Buffett and his team are finally ready to bite the proverbial bullet and sell this laggard at a loss. And whether or not the rumors are true, there's no denying we're starting to see more trading activity within Berkshire's stock portfolio than we've seen in years.. actions that Buffett has seemingly wanted to keep to a minimum until now...
The company's second-quarter numbers won't reveal any recent buys and sells, to be clear. Those trades are reported on an SEC filing called a 13F. That's not what the early July report is.
The upcoming Q2 report will put the spotlight back on all of these recent actions, though, and in some ways might force the financial media to discuss the prospect of Berkshire's impending exit of Kraft Heinz. This discussion, in turn, has the chance to bolster confidence in the conglomerate's near and distant future.
It's a buy sooner rather than later just because it's a buy at all
So, the calendar is somewhat encouraging an investment in this unique company sooner rather than later. Just don't read too much into it. As is the case with any other publicly traded company, this is just one quarter. You should be thinking longer-term than that.
In the sense that Berkshire Hathaway is apt to be just as promising -- even without Buffett's presence -- five, 10, and 20 years from now as it was five, 10, and 20 years ago, though, there's certainly no need to wait until after July's Q2 earnings release to take the plunge.
