Warren Buffett surprises by cutting Berkshire Hathaway’s multi-year stake in Apple in Q2

OMAHA, Neb. — Investor Warren Buffett’s company posted a $47 billion gain on stock sales in the second quarter after he pared Berkshire Hathaway’s massive stake in Apple, but a fall in the paper value of the remaining holdings sent profits tumbling despite improvements at a myriad of companies it owns.

Selling a large chunk of his Apple stake was the biggest news of the quarter — Buffett once called the company’s stake in the iPhone maker a pillar of Berkshire’s business that he intended to hold indefinitely. Other notable investment moves Buffett made this quarter included further cutting his investment in Chinese electric vehicle maker BYD and selling some of his Bank of America stock.

Berkshire did not provide an exact number of Apple shares in Saturday’s report, but estimated the investment was worth $84.2 billion at the end of the second quarter, even though the shares had risen to $237.23 over the summer. At the end of the first quarter, Berkshire’s Apple shares were worth $135.4 billion.

Berkshire said it earned $30.348 billion, or $21,122 per Class A share, in the second quarter. That’s down from $35.912 billion, or $24,775 per Class A share, a year ago, when the paper value of its investment portfolio rose by $24.2 billion.

The value of Berkshire’s investments has fallen by $28.2 billion this year.

Buffett has long warned investors to look primarily at operating profits when assessing Berkshire’s performance, as the figures do not include investment gains and losses, which can vary significantly from quarter to quarter.

By that measure, Berkshire’s operating profits rose more than 15% to $11.598 billion, or $8,072.16 per Class A share, from $10.043 billion, or $6,928.40 per Class A share, a year ago. Geico led Berkshire’s business improvement, while many other companies that are more sensitive to the economy posted weak results.

The results easily topped the $6,530.25 per share earnings expected by four analysts surveyed by FactSet Research.

Berkshire owns a number of insurance companies, as well as BNSF Railway, several large utilities and a diversified group of retail and manufacturing businesses, including brands such as Dairy Queen and See’s Candy.