Berkshire Hathaway Reports 40% Surge in Operating Earnings, Records $157 Billion in Cash Holdings

Berkshire Hathaway announced a substantial increase in its third-quarter operating earnings, accompanied by a substantial cash reserve due to limited investment opportunities, as observed by Warren Buffett. The Omaha-based conglomerate’s operating earnings, which encompass profits from various wholly-owned businesses, including insurance, railroads, and utilities, amounted to $10.761 billion for the last quarter. This figure represents a 40.6% increase compared to the earnings of $7.651 billion reported for the same quarter in the preceding year. At the end of September, Berkshire held a record cash reserve of $157.2 billion, surpassing the previous high of $149.2 billion set during the third quarter of 2021. Warren Buffett, often called the “Oracle of Omaha,” capitalised on the surge in bond yields by investing in short-term Treasury bills yielding at least 5%. By the end of the third quarter, the conglomerate’s investments in such securities amounted to around $126.4 billion, marking a substantial increase from approximately $93 billion at the end of the previous year.

As Berkshire’s Class A shares experienced a remarkable 14% increase in value over the year, the company scaled back its share buyback activities. During the third quarter, the firm allocated $1.1 billion to repurchase shares, bringing the total buybacks for the nine months to approximately $7 billion. However, despite this successful performance, the Class A shares declined approximately 6% from their peak after reaching an all-time high on September 19th. Within Berkshire’s insurance portfolio, Geico, often regarded as the crown jewel and Warren Buffett’s “favorite child,” reported another profitable quarter, with underwriting earnings amounting to $1.1 billion. Geico is currently undergoing a transformation to regain the market share lost to its competitor, Progressive. In contrast, BNSF, the conglomerate’s railroad division, experienced a 15% decline in earnings, primarily due to reduced volumes and increased costs.

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