Berkshire Hathaway spent $9.6 billion on share buybacks in the third quarter, viewing its stock as undervalued amid a 5.8% drop in operating earnings to $12.7 billion. Insurance underwriting profits fell 43%, with Geico hit by higher losses and expenses. Net investment income in insurance also dropped 14% due to lower short-term interest rates.
Despite these pressures, Berkshire’s cash reserves grew to $357 billion after accounting for unsettled treasury bill purchases. The company sold a net $426 million in equities during the quarter. CEO Greg Abel has guided the firm into new investments, including $10 billion in Alphabet for AI and $6.8 billion for homebuilder Taylor Morrison. Abel’s AI focus comes as the sector faces scrutiny over data centre use and market volatility.
BNSF, Berkshire’s rail unit, saw average revenue per car rise 10.5%, boosting profits by 19.3%. Berkshire Hathaway Energy posted an 8.3% gain in earnings, supported by higher utility sales and tax credits, which may remain favourable if Democrats hold power in the US.
The buyback and investment strategy signals a shift in Berkshire’s capital allocation approach. Insurers and finance leaders may need to reassess their own strategies as market conditions and regulatory factors evolve.
