Berkshire’s third-quarter profits fell, but its buybacks hit a new quarterly record—the two moved in completely opposite directions.
Operating earnings were $12.71 billion, down 6% year over year. Insurance was a drag: underwriting profits fell 43% to $1.4 billion, while Geico’s claims and expenses both rose. But Berkshire spent $9.6 billion on buybacks in the third quarter, versus market expectations of just $1.6 billion. It spent $4.5 billion in the second quarter and only $234 million in the first. Revenue came in at $105.6 billion, also beating expectations of $102 billion.
Since Abel took over, the strategy has been clear: when the core business cools, use cash to buy back shares. Berkshire bought about $2 billion worth in the first four weeks of October, bringing the nine-month total to $14.4 billion. But the buybacks are highly price-sensitive: after the share price rose above $800,000, the pace slowed noticeably in October.
Operating earnings were $12.71 billion, down 6% year over year. Insurance was a drag: underwriting profits fell 43% to $1.4 billion, while Geico’s claims and expenses both rose. But Berkshire spent $9.6 billion on buybacks in the third quarter, versus market expectations of just $1.6 billion. It spent $4.5 billion in the second quarter and only $234 million in the first. Revenue came in at $105.6 billion, also beating expectations of $102 billion.
Since Abel took over, the strategy has been clear: when the core business cools, use cash to buy back shares. Berkshire bought about $2 billion worth in the first four weeks of October, bringing the nine-month total to $14.4 billion. But the buybacks are highly price-sensitive: after the share price rose above $800,000, the pace slowed noticeably in October.