Warren Buffett’s Berkshire Hathaway (BRKB) reported third-quarter earnings on Saturday, with operating profit falling more than expected. The conglomerate’s cash pile swelled to a new record as it slashed its stake in Apple (AAPL) further. Buffett halted Berkshire stock buybacks.
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Berkshire Hathaway earnings fell 6% on an operating basis vs. a year earlier to $to $10.09 billion.
Analysts had expected a 1% decline in operating earnings in the third quarter, according to FactSet.
Berkshire Hathaway’s operating earnings rose about 16% in Q2 and 40% in Q1, fueled by insurance underwriting and insurance interest income. Net income fell over both quarters.
Warren Buffett advises investors to focus on operating earnings, which show how the collection of businesses that Berkshire actually runs are doing. Net income includes stock investment gains or losses, which can be volatile, skewing the financial picture.
In addition to major insurance businesses, including Geico, Berkshire Hathaway owns utilities, BNSF railroad and more.
Berkshire stock undercut the 50-day moving average in Friday’s stock market trading. But it shows a flat base with a 484.2 buy point, according to MarketSurge pattern recognition.
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In Q3, Berkshire Hathaway didn’t buy back any of its own stock. That compares with share repurchases worth $345 million in Q2 2024, $2.6 billion in Q1 2024 and $2.2 billion in Q4 2023.
Buffett is a legendary value investor. In the first half of 2024, he scaled back Berkshire stock buybacks as shares rose.
Berkshire Hathaway sold 100 million Apple in Q3, leaving it with 300 million shares. That’s according to the company’s 10-Q, which came out on Saturday along with the earnings release.
The 25% cut in Berkshire’s Apple stock stake followed a near-50% reduction in the second quarter. Buffett’s stake is down from 905 million Apple shares at the start of 2024.
Meanwhile, Warren Buffett sold about $9 billion in Bank of America (BAC) shares in the quarter. Earlier filings had already shown that the Buffett-led conglomerate sold Bank of America stock significantly through Q3 and has continued to do so in the fourth quarter.
Overall, Berkshire sold about $36 billion in equities overall, mostly Apple stock and BofA. The conglomerate also was a net seller in the first half of the year, mostly Apple.
Bank of America and Apple are among the biggest holdings in Berkshire Hathaway’s stock portfolio, both by number of shares and market value.
Berkshire’s cash hoard swelled by about $48 billion to $325.21 billion. That reflects the Apple-led equity sales, the $10.1 billion in operating profit and the lack of any Berkshire buybacks.
Berkshire’s cash levels had soared to $277 billion in Q2 from $189 billion in Q1.
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