Berkshire Hathaway operating income up 20%, conglomerate buys back $1 billion in shares

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Berkshire Hathaway Chairman and CEO Warren Buffett.

Andrew Harnik | AP

Berkshire Hathaway on Saturday posted solid corporate earnings gains in the third quarter despite mounting fears of a recession, as Warren Buffett continued to buy back his shares at a modest pace.

Operating income of the Omaha-based conglomerate — which includes profits made from the conglomerate’s numerous businesses, such as insurance, railroad and utilities — was $7,761 billion in the third quarter, a 20% increase from from a year earlier.

Insurance and investment income came in at $1,408 billion, up from $1,161 billion a year earlier. Revenues from the company’s utilities and energy companies totaled $1,585 billion, up $1,496 billion year over year. However, insurance underwriting suffered a loss of 962 million, while rail revenue fell to $1,442 billion, from $1,538 billion in 2021.

Berkshire spent $1.05 billion on share repurchases during the quarter, bringing the nine-month total to $5.25 billion. The pace of the buyback was in line with the $1 billion purchased in the second quarter. The buybacks were well below CFRA’s expectations, as the analyst estimated it would be comparable to the total of $3.2 billion in the first quarter.

However, Berkshire posted a net loss of $2.69 billion in the third quarter, from a profit of $10.34 billion a year earlier. The quarterly loss was largely due to a decline in Berkshire’s stock holdings amid a rollercoaster ride in the market.

Berkshire suffered a loss of $10.1 billion on its investments during the quarter, bringing the decline to $63.9 billion in 2022. The legendary investor again told investors that the amount of investment losses in any given quarter is “usually meaningless.”

Shares of Buffett’s conglomerate have outperformed the broader market this year, with Class A shares falling about 4% from the S&P 500a 20% decrease. The stock lost 0.6% in the third quarter.

Buffett continued to buy the dip in Occidental Petroleum in the third quarter as Berkshire’s stake in the oil giant hit 20.8%. In August, Berkshire received regulatory approval to buy up to 50%, fueling speculation it might eventually buy the entire Houston-based Occidental.

The conglomerate amassed nearly $109 billion in cash at the end of September, compared to a total of $105.4 billion at the end of June.



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