Berkshire Hathaway’s operating earnings rise 20%, and the conglomerate buys back another $1 billion worth of shares

Despite rising recession fears, Berkshire Hathaway posted a strong third-quarter profit on Saturday, and Warren Buffett continued to buy back stock at a modest pace. The operating earnings of the Omaha-based conglomerate – which include profits from the many businesses owned by the conglomerate, such as insurance, railroads, and utilities – totaled $7.761 billion during the third quarter of 2018. Insurance-investment income came in at $1.408 billion, up from $1.161 billion a year earlier. The company’s utilities and energy businesses generated earnings of $1.585 billion, up from $1.496 billion last year. However, insurance underwriting recorded a loss of 962 million, while railroad earnings declined from $1.538 billion in 2021 to $1.442 billion in 2022.

A total of $1.05 billion in share repurchases were made by Berkshire during the quarter, bringing the total to $5.25 billion for the nine months. The buyback pace was in line with the $1 billion purchased in the second quarter. Repurchases were well below CFRA’s expectation as its analyst estimated it would be similar to the $3.2 billion total in the first quarter. However, Berkshire did post a loss of $2.69 billion in the third quarter, compared to a gain of $10.34 billion in the previous quarter. The quarterly loss was largely due to a drop in Berkshire’s equity investments amid the market’s rollercoaster ride. Berkshire suffered a $10.1 billion loss on its investments during the quarter, bringing its 2022 decline to $63.9 billion. The legendary investor again stated that investment losses are usually meaningless in any quarter. Buffett’s conglomerate has been outperforming the broader market this year, with Class A shares dipping about 4% versus the S&P 500′s 20% decline. The stock dropped 0.6% 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 reached 20.8%. In August, Berkshire received regulatory approval to purchase up to 50%, spurring speculation that it may eventually buy all Houston-based Occidental. The conglomerate amassed a cash pile of nearly $109 billion at the end of September, compared to a total of $105.4 billion at the end of June.