Berkshire Hathaway Chairman and CEO Warren Buffett.
Andrew Harnik | AP
Berkshire Hathaway on Saturday posted solid third-quarter operating profit despite rising recession fears, while Warren Buffett continued to buy back his shares at a modest pace.
The Omaha-based group’s operating income — which includes profits from a multitude of group-owned businesses such as insurance, railroads and utilities — totaled $7.761 billion in the third quarter, up 20% over the same period last year.
Insurance-investment income came in at $1.408 billion, up from $1.161 billion a year earlier. Earnings from the company’s utilities and energy businesses totaled $1.585 billion, up from $1.496 billion in the same period last year. However, underwriting operations suffered a $962 million loss, while rail income fell to $1.42 billion from $1.538 billion in 2021.
Berkshire spent $1.05 billion on stock buybacks during the quarter, bringing its nine-month total to $5.25 billion. The pace of acquisition is in line with the $1 billion figure purchased in the second quarter. The acquisitions were much lower than CFRA’s expectations as their analyst estimated it would equate to a total of $3.2 billion in the first quarter.
However, Berkshire posted a net loss of $2.69 billion in the third quarter, compared with a profit of $10.34 billion a year earlier. The quarterly loss was largely due to a drop in Berkshire’s equity investment amid a roller coaster market ride.
Berkshire lost $10.1 billion on its investments for the quarter, bringing the 2022 drop to $63.9 billion. The Legendary Investor told investors again that the amount of investment losses in any given quarter is “usually meaningless.”
Buffett’s shares have outperformed the broader market this year, with Class A shares down about 4% from S&P 500down 20%. Shares fell 0.6% in the third quarter.
Buffett continues to buy Mysterious Oil in the third quarter, when Berkshire’s stake in the oil giant climbed to 20.8%. In August, Berkshire receives regulatory approval to buy up to 50%, sparking speculation that it could eventually buy the entire Houston-based Occidental company.
The group had amassed a fortune of nearly $109 billion at the end of September, compared with a total of $105.4 billion at the end of June.
