Berkshire Hathaway spent approximately $9.6 billion on share repurchases in the third quarter, an all-time high for the company. Operating profit fell as insurance underwriting earnings weakened, while the cash pile rose to a record $377.4 billion.
Berkshire Hathaway spent approximately $9.6 billion repurchasing its own shares in the third quarter, even as operating earnings declined. The conglomerate reported the results on Saturday.
The stock buyback outlay was the company's largest single-quarter total of the year and an all-time high. It surpassed the $4.5 billion repurchased in the second quarter and $234 million in the first.
Operating profit slips on weaker insurance results
Third-quarter operating earnings dropped 5.8%, weighed down by weaker insurance results. Operating profit slipped to $12.7 billion from $13.48 billion a year earlier, according to a company regulatory filing.
Operating profit excludes unrealized investment gains and losses, which is why Warren Buffett considers it a truer reflection of operational performance than net income. Net income, by contrast, fell 28% to $22.11 billion, according to Reuters, and includes unrealized gains and losses on stocks Berkshire still owns.
However, not every unit weakened. Lower insurance underwriting earnings across its carrier units drove the decline, offsetting operating profit growth at the BNSF Railway freight network, Berkshire Hathaway Energy, and select industrial manufacturing subsidiaries.
Cash climbs despite the repurchases
Even with the record buybacks and ongoing equity investments, liquidity kept expanding. Cash, cash equivalents, and short-term U.S. Treasury bill holdings rose to $377.4 billion as of Sept. 30, up from $365.5 billion at the end of June.
The growth underscores ongoing caution toward large-scale corporate acquisitions. It also highlights the challenge Buffett and his investing lieutenants face in finding acquisitions at sensible valuations, particularly where private market pricing remains elevated.
Sources: Investing.com, Reuters
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