Berkshire Q3 Operating Income Dips, Cash Position Swells To $325B, Retail Sentiment Mixed

Berkshire Hathaway, Inc. ($BRK-A) ($BRK-B) reported Saturday third-quarter operating earnings that fell from a year ago but the bottom-line swung to a profit, thanks to investment gains.

Omaha, Nebraska-based Berkshire said its operating earnings for the quarter were $10.09 billion or $7,019 per Class A share, falling 6% year-over-year (YoY) and missing the consensus estimate of $7,611 per Class A share, according to Reuters. 

The decline stemmed primarily from underwriting losses on older insurance policies, Hurricane Helene-related insurance claims, and adverse forex impact from a firmer dollar.

Including the $20.51 billion in investment gains, net earnings were $26.25 billion, reversing from a loss of $12.77 billion a year ago, when the company incurred investment losses of $29.78 billion.

Total costs edged up merely 0.70% to $81.22 billion as a jump in insurance losses was more than offset by lower costs associated with its utility and energy businesses.

The Warren Buffett-led company’s total revenues fell marginally from $93.21 billion a year ago to $93 billion. 

Berkshire’s end-of third quarter fixed income securities’ portfolio was nearly unchanged sequentially at $16.04 billion, while equity holdings fell from $284.871 billion at the end of the second quarter to $271.65 billion at the end of the third quarter.

Cash pile spiked to $325.21 billion, up from $276.9 billion at the end of the second quarter, as the Buffett-led company went about trimming stakes in two of its core holdings, namely Apple, Inc. ($AAPL) and Bank of America Corp. ($BAC).

The investment holding company did not buy back any shares in the third quarter, marking the first since the second quarter of 2018.

Berkshire is now the world’s ninth largest global corporation with a market cap of $974.27 billion. It, along with Saudi Aramco are the only non-tech companies in the top ten list. 

On the Stocktwits platform, users were mixed about the earnings report. 

Berkshire’s cash pile itself makes the stock undervalued, a user said following the results.

The lack of buybacks and lightening of Apple holdings did not go down well with some users.

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