Warren Buffett 'sBerkshire Hathaway reported third-quarter earnings on Saturday.- The investor's company shed light on its operations, buybacks, cash, and stock-market activity.
Warren Buffett's Berkshire Hathaway reported third-quarter earnings on Saturday. They shed light on its limited stock-market activity, aggressive
1. Portfolio tweaks
Buffett's company sold about $2 billion worth of
Berkshire sold about $600 million worth of financial stocks and $500 million of commercial and industrial stocks on a cost basis in the period. Meanwhile, it invested about $90 million in consumer-product stocks on the same basis. The company will disclose the contents of its US stock portfolio as of September 30 next week.
2. Buying Berkshire
Buffett's conglomerate spent $7.6 billion on
Berkshire likely repurchased another $1.8 billion of stock between October 1 and October 27, based on the decline in its outstanding shares and its average stock price during that period. That leaves the company on track to spend over $5 billion on buybacks this quarter, which would lift its total repurchases for the year to a record $25 billion.
3. More cash than ever
The money in Berkshire's coffers swelled by about $5 billion to a fresh high of $149 billion last quarter. The company's cash pile now exceeds the entire market capitalization of Philip Morris ($147 billion), Starbucks ($138 billion), or Goldman Sachs ($136 billion).
Buffett noted in May he would deploy up to $80 billion on the right opportunity. Berkshire's mushrooming cash reserves suggest the investor is still balking at stock valuations, being priced out of acquisitions by private-equity firms and SPACs, and might not see his company's stock as that much of a bargain.
4. Bouncing back
Berkshire's businesses continued rebounding from the pandemic last quarter. Higher sales across its insurance, railroad, energy, manufacturing, distribution, services, and retailing businesses drove total revenue up 12% to about $71 billion, stoking an 18% rise in operating income to $6.5 billion.
Notably, Berkshire's insurance profits plunged by two-thirds year-on-year to $317 million as Hurricane Ida and floods in Europe sparking a surge in claims. Moreover, McLane Company swung to a loss as higher gas prices increased the wholesale distributor's fuel expenses, and stiffer competition for a shrinking number of truck drivers raised its staffing costs.