Berkshire Cash Hoard Swells To Record $382B As Buffett Era Nears End: Analyst Also Sees ' Very Powerful Message' To Shareholders

• The firm's insurance underwriting more than tripled during the third quarter, driven by the absence of any major catastrophes.
• Berkshire was a net seller of stocks for the 12th consecutive quarter, while it did not repurchase any shares for the fifth straight quarter.
• "If they're not buying back their shares, why should you?" — Cathy Seifert, CFRA analyst, on the message the company is delivering.

Berkshire Hathaway's (BRK.B) stock was in focus ahead of the fresh trading week after the Warren Buffett-led company's cash holdings surged to a record $381.7 billion in the third quarter after an uptick in operating income.

The Omaha, Nebraska-based firm's operating earnings, which exclude unrealized gains on Berkshire's equity holdings, rose to $13.5 billion, up from $10.1 billion in the year-ago quarter. The firm's net income rose to $30.79 billion, or $21,413 per class A share, compared with $26.25 billion, or $18,272 per class A share, in the same period last year.

What Drove Berkshire Q3 Earnings?

The firm's insurance underwriting more than tripled during the third quarter, as it retained more premiums amid the absence of any major catastrophes. The hurricane season has seen a mild start this year, compared with 2024, when Hurricane Helene resulted in millions in losses for the firm.

Its railroad unit, BNSF, reported earnings of $1.45 billion, up nearly 5% from the prior year, primarily from core pricing gains, improved operating efficiencies, and lower effective income tax rates. The railroad, which operated in 28 states, saw an uptick in the volume of agricultural, energy, and consumer product shipments as West Coast importers moved goods across the country ahead of an expected tariff hike.

The auto insurer Geico's pretax underwriting earnings declined 13% due to more claims settlements and a 40% jump in underwriting costs, which many analysts attributed to a rise in advertising spending. Berkshire's utility businesses posted a 9% decline in operating earnings amid wildfire-related costs and higher spending on natural gas pipelines.

Berkshire, A Net Seller Of Stocks, Also Withholds Buybacks

Berkshire, due to its wide range of holdings spanning from dairies to energy, is considered an economic bellwether in the U.S. Its peak cash holdings, despite a stock market boom over the past few years, have indicated that Buffett is exercising caution before making a significant investment.

Berkshire, whose holdings include Apple and Chevron, was a net seller of stocks for the 12th consecutive quarter, while it did not repurchase any shares for the fifth straight quarter. The industrial conglomerate's last significant purchase was a 50% stake in Occidental Petroleum's OxyChem unit.

"I think that sends a very powerful message to shareholders," said Cathy Seifert, an analyst at CFRA Research, according to a Bloomberg News report. "If they're not buying back their shares, why should you?"

Seifert reportedly stated that, despite the rise in earnings, Berkshire's 2% revenue growth during the period is unlikely to improve investor sentiment. "I'm struggling to find a catalyst" for an increase in the stock price, she stated.

What Is Retail Thinking?

Retail sentiment on Stocktwits Berkshire Class B shares was in the 'neutral' territory at the time of writing.

"If you are [a] smart investor, the only safe-haven at the moment is BRK," one investor said, taking note of the cash pile.

https://stocktwits.com/Sohailcheema/message/634621859 

"Even if you put your money in a high-yield savings account, you would be up more than this nonsense this current year," another user said.

https://stocktwits.com/ness1177/message/634611743 

Berkshire stock is up 4.7% this year, underperforming the S&P 500 and the Nasdaq 100, as Buffett had said he would step down as the conglomerate's chief executive after decades in charge.

Also See: US Oil Production Hits Record 13.8 Million Barrels Per Day In August: EIA

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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