Berkshire Hathaway’s Operating Earnings Increase by 20%, and the Conglomerate Repurchases an Additional $1 Billion in Stock

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Last Updated on November 6, 2022 by Bitfinsider

In spite of growing concerns about the economy entering a recession, Berkshire Hathaway reported on Saturday a significant increase in operating earnings for the third quarter. Meanwhile, Warren Buffett maintained a moderate rate of stock repurchases.

Operating earnings for the Omaha-based conglomerate totaled $7.761 billion in the third quarter, which is an increase of 20% compared to the same time period the previous year. Operating earnings include profits made from the wide variety of businesses owned by the conglomerate, such as insurance, railroads, and utilities.

The income from insurance investments reached $1.408 billion, which is an increase from $1.161 billion the previous year. The earnings that were brought in by the company’s energy and utility divisions came in at $1.585 billion, which is an increase from the $1.496 billion that was brought in the previous year. However, insurance underwriting saw a loss of 962 million, while earnings from railroad operations decreased to 1.442 billion from a previous level of $1.538 billion in 2021.

The amount that Berkshire spent on the repurchase of its own shares during the third quarter was $1.05 billion, bringing the total amount spent during the first nine months to $5.25 billion. The rate of buybacks was comparable to the one billion dollars that was acquired during the second quarter. Repurchases came in significantly lower than what was anticipated by CFRA, which had predicted that the overall amount would be comparable to the $3.2 billion recorded in the first quarter.

Despite this, Berkshire reported a net loss of $2.69 billion for the third quarter, which compares to a gain of $10.34 billion for the same period in the prior year. The quarterly loss was mostly attributable to a decline in Berkshire’s equity assets in the midst of the wild ride that the market was on.

During the third quarter, Berkshire sustained a loss on its investments that amounted to $10.1 billion, increasing the total loss since 2022 to $63.9 billion. The famed investor reiterated to the audience that the amount of money lost on investments during any particular quarter is “often irrelevant.”

This year, the Class A shares of Buffett’s conglomerate have had a decrease of approximately 4%, while the S&P 500 has experienced a decline of 20%. This indicates that Buffett’s shares have been outperforming the broader market. In the third quarter, the stock experienced a decline of 0.6%.

During the third quarter, Buffett continued to buy the decline in Occidental Petroleum’s stock, bringing Berkshire’s holding in the oil giant up to 20.8% of its total value. In August, Berkshire was granted regulatory authority to purchase up to fifty percent of Occidental, which sparked rumors that the company may eventually acquire the entire Houston-based company.

The multinational corporation’s cash holdings increased to a total of over $109 billion by the end of September, up from a sum of $105.4 billion when the second quarter came to a close.

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