Berkshire Hathaway, led by Warren Buffett , disclosed robust third-quarter operating earnings and a record-high cash reserve of $157 billion.
Operating income amounted to $10.8 billion, marking a significant increase of 40.6% compared to the previous year when it was $7.7 billion.
However, Berkshire reported a net loss of $12.8 billion for the quarter, contrasting with a $2.8 billion loss in the same period the previous year.
The conglomerate, headquartered in Omaha, Nebraska, experienced investment losses of $23.5 billion during the last quarter, compared to a $10.4 billion loss in the preceding year.
On the brighter side, Berkshire’s insurance underwriting business demonstrated impressive earnings of $2.4 billion, showing a positive turnaround from a $1.1 billion loss in the same quarter of the previous year. Additionally, insurance investment income rose to $2.5 billion, up from $1.4 billion during the corresponding period a year ago.
Geico, one of the prominent insurance companies owned by Berkshire, reported a substantial underwriting profit of $1.053 billion, a significant improvement from the $759 million loss incurred during the third quarter of the previous year.
Berkshire bought back about $1.1 billion in stock during the third quarter, bringing the nine-month total to approximately $7 billion in stock repurchases so far this year.
The company’s cash hoard rose to $157.2 billion, up from $147.4 in the second quarter of this year.
Buffett earlier this year brushed off Fitch Ratings’ downgrade of US credit from the top AAA grade to AA+, telling CNBC on August 3 that Berkshire bought $10 billion worth of US Treasuries that week after doing the same a week prior. led by Warren Buffett
“The only question for next Monday is whether we will buy $10 billion in 3-month or 6-month [Treasury notes],” Buffett said at the time.
Treasury yields topped levels not seen in over a decade in October, before retreating last week after the Federal Reserve held rates steady for a second consecutive time.
US stocks have rallied this year on artificial intelligence hype and hopes that the Fed will soon stop hiking interest rates, helping Berkshire’s turnaround from last year’s rout when the market nosedived.
The company’s bets abroad have also paid off. Berkshire revealed in 2020 that it had bought stakes of about 5% in each of Japan’s top five trading companies, totaling $6.7 billion in investments at the time.
The company doubled down this year, taking its stakes in each company to average above 8.5%, as Japan’s stock market soared to 33-year highs.
“It was like having God just opening a chest and just pouring money into it,” Charlie Munger, vice chair of Berkshire Hathaway, said of the investments in an interview with the Acquired podcast released in October.
Berkshire Hathaway Class A shares are up 13.9% for the year as of Friday’s close, underperforming the benchmark S&P 500.