Berkshire Hathaway Chairman and CEO Warren Buffett.
Andrew Harnik | AP
Berkshire Hathaway on Saturday posted a solid third-quarter operating profit gain despite growing recession fears, while Warren Buffett continued to buy back his shares at a modest pace.
The Omaha-based conglomerate̵[ads1]7;s operating income — which includes profits from myriad businesses owned by the conglomerate such as insurance, railroads and utilities — totaled $7.761 billion in the third quarter, up 20% from the same period last year.
Income from insurance investments came in at $1.408 billion, up from $1.161 billion a year earlier. Revenue from the company’s utilities and energy businesses came in at $1.585 billion, up from $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 buybacks during the quarter, bringing its nine-month total to $5.25 billion. The pace of buybacks 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 equal the total of $3.2 billion in the first quarter.
However, Berkshire had a net loss of $2.69 billion in the third quarter, compared with a gain of $10.34 billion a year earlier. The quarterly loss was largely due to a drop in Berkshire’s stock investments amid the market’s roller-coaster ride.
Berkshire suffered a $10.1 billion loss on its investments during the quarter, bringing its 2022 shortfall to $63.9 billion. The legendary investor again told investors that the amount of investment losses in any given quarter is “usually meaningless.”
Shares in Buffett’s conglomerate have outperformed the broader market this year, with Class A shares falling around 4% compared with S&P 50020% decrease. The share fell 0.6 percent 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 has reached 20.8%. In August, Berkshire received regulatory approval to buy up to 50%, spurring speculation that it may eventually buy all of Houston-based Occidental.
The conglomerate amassed a cash pile of nearly $109 billion at the end of September, compared with a total of $105.4 billion at the end of June.