Berkshire Hathaway speeds up stock buybacks despite falling profit

Berkshire Hathaway sped up its stock buybacks in the third quarter, even as its profits fell, in the first clear sign of how new Chief Executive Greg Abel is willing to put the conglomerate's huge cash pile to use.

The Omaha, Nebraska-based company said Saturday that operating earnings fell 6% to $12.71 billion and net earnings dropped 28% to $22.11 billion, hurt by weak results in its insurance businesses, such as Geico, and by smaller gains on its stock investments, according to Reuters.

At the same time, Berkshire bought back $9.6 billion of its own shares between July and September, and about $2 billion more in October, on top of $4.8 billion repurchased earlier in the year. After those purchases, the company ended September with $356.9 billion in cash and equivalents.

Revenue, by contrast, rose 11% to $105.65 billion, the second straight quarter of double-digit growth, despite declines in consumer businesses such as Fruit of the Loom and Forest River. Insurance profit fell 26% and underwriting profit dropped 43%; at Geico, pretax profit plunged 45%.

Not everything declined: profit at the BNSF railroad rose 19%, Berkshire Hathaway Energy profit increased 8% and Precision Castparts lifted pretax profit by 30%, helped by aerospace sales.

It is the third quarter for Abel, 64, as chief executive, after the departure of Warren Buffett, 96, who remains chairman emeritus; his son Howard Buffett became chairman in September. Berkshire warned that “considerable uncertainty” remains over tariffs and wars, and that several of its retail businesses face sluggish demand.

Photo: SRN News

Source: Reuters