Nov 7 (Reuters) – Berkshire Hathaway accelerated stock repurchases in the third quarter, finding its own shares among the best assets to invest in its huge cash pile, while lower results from its insurance businesses weighed on overall profit.
The Omaha, Nebraska-based conglomerate said on Saturday it bought back $9.6 billion of stock in the quarter, on top of $4.8 billion earlier in the year, and about $2 billion more in the first four weeks of October.
Chief Executive Greg Abel has appeared more willing to spend Berkshire’s cash than his predecessor Warren Buffett, who had difficulty finding things to buy toward the end of his 60 years at the helm. Berkshire ended September with $356.9 billion of cash and equivalents.
The July-September quarter was the third since Abel, 64, became chief executive. Buffett, 96, stepped down as chairman in September but remains chairman emeritus.
Quarterly operating profit fell 6% from a year earlier to $12.71 billion, or about $8,954 per Class A share.
Insurance was a major reason for the decline, as profit fell 26%. Underwriting profit fell 43%, and included a 45% pretax decline at the Geico insurer, where accident losses and advertising spending increased.
Net income fell 28% to $22.11 billion, including unrealized gains and losses on stocks that Berkshire still owns. Berkshire urges investors to ignore the volatility from changes in the values of stocks it is not selling.
SUPPORT FOR AI
Berkshire’s cash holdings have declined from $380.2 billion at the end of March.
Its purchases this year have included billions of dollars of Alphabet shares to help Google’s parent expand in artificial intelligence, though the stock trades below discounted prices that Berkshire paid.
Abel also spent $6.8 billion in July to buy home builder Taylor Morrison, and Berkshire has taken a 4% stake in Italian software technology company Bending Spoons.
Berkshire’s biggest year for buybacks was 2021, when it repurchased $27 billion of stock.
(Reporting by Jonathan Stempel in New YorkEditing by Tomasz Janowski)
