Berkshire Spends $9.6 Billion on Buybacks as Cash Hits $377 Billion
Berkshire repurchased $9.6 billion of stock in Q3, more than double Q2, as cash hit $377.4 billion and insurance underwriting profit dropped 47% to $1.7 billion.
By Daniel Okafor
2 min read
What's News
- Berkshire repurchased $9.6 billion of its own shares in Q3, more than double the $4.5 billion spent in Q2.
- Q3 revenue rose 11% year over year to $105.6 billion; operating profit fell 5% to $13.7 billion.
- Insurance underwriting profit dropped 47% to $1.7 billion, with GEICO taking a 45% hit.
- Berkshire's cash pile reached $377.4 billion, including $20.5 billion in unsettled Treasury purchases.
- Year-to-date buybacks total $14.4 billion, with roughly another $2 billion in October.
By Daniel Okafor
Berkshire Hathaway spent $9.6 billion repurchasing its own shares in the third quarter — more than double the $4.5 billion it spent in the second quarter. The company disclosed the figure alongside Q3 results that showed revenue of $105.6 billion, up 11% year over year, while operating profit fell 5% to $13.7 billion.
The buyback surge is the bigger story. Under Greg Abel's stepped-up capital allocation, Berkshire has now repurchased $14.4 billion of stock year to date, plus roughly $2 billion more in October.
What happened to insurance?
Insurance drove the profit decline. Underwriting profit dropped 47% to $1.7 billion. GEICO alone took a 45% hit. Investment income also fell, down 11% to $3.3 billion as interest rates moved lower.
The picture was brighter elsewhere in the portfolio:
- BNSF railroad: pre-tax profit climbed 19% to $2.3 billion, helped by better railroad efficiency.
- Berkshire Hathaway Energy: pre-tax profit rose 18% to $1.1 billion on stronger utility operations.
- Manufacturing and retail: pre-tax profit increased 13% to $5.3 billion. These businesses, including Pilot and McLane, generate around 61% of Berkshire's total revenue.
Why is Berkshire a net seller of stocks again?
Berkshire pulled back from its aggressive second-quarter stock purchases. In Q3 it bought $2.4 billion in equities but sold $2.8 billion, making it a net seller again.
The company's reported cash pile reached $377.4 billion. That figure includes $20.5 billion in unsettled Treasury purchases, leaving roughly $357 billion in available liquidity.
What does this say about Abel's strategy?
The pattern is clear. Abel is putting more money into buybacks while staying cautious about outside investments. Buying back stock signals he sees Berkshire's own shares as the best available use of capital.
The operating businesses support that stance. Railroads, energy, manufacturing and retail all posted stronger results in the quarter. The pressure point is insurance, where underwriting profitability remains weak after the 47% drop in profit.
With roughly $357 billion in liquidity, the unresolved question is where Berkshire can put that money to work without sacrificing returns.
Source: tradingview.com
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Correspondent covering money, funding and market shifts around entrepreneurship, startups and venture funding at Business Bearings.
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