Berkshire Hathaway (BRK.B) Stock: Cash Holdings Hit Record $381 Billion in Third Quarter

TLDR

• Berkshire Hathaway’s operating profits jumped 33% in Q3 to $13.5 billion, driven by strong insurance underwriting results
• The company’s cash pile reached a record $381.7 billion, up from $344.1 billion in Q2
• Berkshire bought back zero shares for the second straight quarter, suggesting Buffett doesn’t see the stock as undervalued
• The company was a net seller of $6 billion in stocks during Q3, possibly continuing to trim its Apple position
• Warren Buffett plans to step down as CEO by year-end while remaining chairman

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Berkshire Hathaway reported third-quarter operating earnings of $13.5 billion after taxes, a 33% increase from the $10.1 billion recorded in the same period last year. The results topped analyst expectations by roughly 9%.

The insurance segment led the charge with underwriting profits tripling to $2.4 billion after taxes. Geico generated pre-tax underwriting profits of $1.8 billion, down slightly from $2 billion a year earlier.

The reinsurance business posted a particularly strong quarter. It recorded underwriting profits of about $900 million compared to a $300 million loss in the third quarter of 2024. The lack of major U.S. hurricanes during the period helped boost those numbers.

Berkshire Hathaway Inc., BRK-B

Burlington Northern Santa Fe railroad saw earnings rise 5% to $1.45 billion. The manufacturing, service, and retailing segment gained 8% to $3.6 billion in earnings.

Operating profits per A share came in at approximately $9,376 for the quarter. Total after-tax earnings reached $30.8 billion, up 17% year-over-year, though Buffett consistently advises investors to focus on operating profits rather than total earnings.

Cash Stockpile Continues Growing

Berkshire’s cash and equivalents climbed to a record $381.7 billion at the end of September. That’s up from $344.1 billion at the end of June.

The company was a net seller of stocks during the quarter. It purchased about $6.4 billion in equities while selling roughly $12.4 billion.

Berkshire generated $8.2 billion in realized investment gains during Q3. The size of these gains relative to total stock sales suggests the company may have continued reducing its Apple stake.

The cost basis of Berkshire’s consumer stock holdings declined in the quarter. This would align with potential Apple sales, though the company hasn’t confirmed any specific transactions.

Berkshire will reveal its complete equity holdings in a 13-F filing expected in mid-November. The company held 280 million Apple shares at the end of the second quarter after cutting the position by 20 million shares during that period.

No Stock Buybacks Again

For the second consecutive quarter, Berkshire didn’t repurchase any of its own shares. This marks one of the longest stretches without buybacks since Buffett received expanded buyback authority in 2018.

The lack of buybacks signals Buffett doesn’t view the stock as trading below his conservative estimate of intrinsic value. Companies typically buy back stock when they believe shares are undervalued.

Buybacks increase earnings per share by reducing the total number of shares outstanding. The absence of repurchases disappointed some investors who watch buyback activity as a signal of management’s view on valuation.

Berkshire’s Class B shares have risen 6.1% year-to-date. That trails the S&P 500’s 16.3% gain over the same period.

The stock has faced pressure since May when Buffett announced he would step down as CEO at year-end. He’ll remain as chairman while Vice Chair Greg Abel takes over the CEO role.

The majority of Berkshire’s cash sits in short-term Treasury bills. This generates low-risk yields while the company waits for what Buffett considers attractive investment opportunities.

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