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Berkshire Hathaway buys back $9.6 billion of its own stock but its profits declined

By JOSH FUNK  -  AP

OMAHA, Neb. (AP) — Berkshire Hathaway repurchased $9.6 billion worth of its own shares in the third quarter, but Geico disappointed and its overall profit fell more than 28% as the value of its investments changed.

But the buybacks likely came to a halt recently as Berkshire's Class A stock price surged past $878,000 and topped where it was before Warren Buffett surprised investors with his plans to retire at the annual meeting in May 2025. He gave up the chairman title in September after relinquishing the CEO job to Greg Abel in January.

Berkshire's massive cash pile also returned to growing in the third quarter and reached $377.4 billion, up from $365.5 billion at the end of June.

CFRA Research analyst Cathy Seifert said Geico is in a tough spot right now with insurance premiums declining at the same time the average cost of the claims are increasing. Geico's underwriting profit fell to $1.35 billion from last year's $2.37 billion. Competitors like Progressive are handling the pressure better.

Berkshire's non-insurance businesses that Abel has overseen for years — such as manufacturers like Precision Castparts, the utilities and BNSF railroad — seem to be performing better than its massive insurance unit even with the lack of major hurricanes or other catastrophes this year.

“I think we’re seeing the businesses that play to Greg’s strengths do well. But the question is what about the rest of the franchise,” Seifert said.

Berkshire reported a $22.1 billion profit, or $15,502 per Class A share, on Saturday morning. That's down from $30.8 billion, or $21,413 in last year's third quarter, but those bottom-line figures always tend to obscure how the dozens of companies the conglomerate owns are performing.

The company has long recommended that investors pay more attention to operating earnings, which exclude the value of its investments that can vary widely, but those also slipped nearly 6% to $12.7 billion, or $8,907 per Class A share. That's down from $13.485 billion, or $9,376.15 per Class A share a year ago.

The four analysts surveyed by FactSet Research had predicted Berkshire would report operating earnings of $8,821.84 per Class A share.

Berkshire owns several major insurers, including Geico, a collection of big utilities, BNSF railroad and a varied assortment of manufacturing and retail companies, including Precision Castparts and See’s Candy.

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