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Berkshire Hathaway Q3 earnings BRK

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Berkshire Hathaway Chairman and CEO Warren Buffett.

Andrew Harnik | AP

Berkshire Hathaway on Saturday posted a solid gain in operating profits during the third quarter despite rising recession fears, while Warren Buffett kept buying back his stock at a modest pace.

The Omaha-based conglomerate’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — totaled $7.761 billion in the third quarter, up 20% from year-earlier period.

Insurance-investment income came in at $1.408 billion, up from $1.161 billion a year earlier. Earnings from the company’s utilities and energy businesses came in at $1.585 billion, up from $1.496 billion year over year. Insurance underwriting suffered a loss of 962 million, however, while railroad earnings dipped to $1.442 billion from $1.538 billion in 2021.

Berkshire spent $1.05 billion in share repurchases during the quarter, bringing the nine-month total to $5.25 billion. The pace of buyback 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 net loss of $2.69 billion in the third quarter, versus a $10.34 billion gain a year before. 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 told investors again that the amount of investment losses in any given quarter is “usually meaningless.”

Shares of Buffett’s conglomerate have been outperforming the broader market this year, with Class A shares dipping about 4% versus the S&P 500‘s 20% decline. The stock dipped 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 has reached 20.8%. In August, Berkshire received regulatory approval to purchase 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 to a total of $105.4 billion at the end of June.

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Berkshire Hathaway BRK earnings Q2 2022

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An Andy Warhol-like print of Berkshire Hathaway CEO Warren Buffett hangs outside a clothing stand during the first in-person annual meeting since 2019 of Berkshire Hathaway Inc in Omaha, Nebraska, U.S. April 30, 2022.

Scott Morgan | Reuters

Berkshire Hathaway’s operating profits jumped in the second quarter despite fears of slowing growth, but Warren Buffett’s conglomerate was not immune to the overall market turmoil.

The conglomerate’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — totaled $9.283 billion in the second quarter of 2022, Berkshire reported Saturday morning. It marked a 38.8% increase from the same quarter a year ago.

However, the company posted a $53 billion loss on its investments during the quarter. The legendary investor again asked investors to not focus on the quarterly fluctuations in its equity investments.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said in a statement.

Stocks tumbled into a bear market during the second quarter after aggressive rate hikes from the Federal Reserve to tame soaring inflation sparked fears of a recession. The S&P 500 posted a more than 16% quarterly loss – its biggest one-quarter fall since March 2020. For the first half, the broader market index dropped 20.6% for its largest first-half decline since 1970.

The conglomerate’s Class A stock fell more than 22% in the second quarter, and it’s now down nearly 20% from an all-time high reached March 28. Still, Berkshire’s stock is outperforming the S&P 500 significantly, down 2,5% versus the equity benchmark’s 13% loss year to date.

Berkshire said it spent approximately $1 billion in share repurchases during the second quarter, bringing the six-month total to $4.2 billion. However, that’s a slower repurchase pace than the one seen in the first quarter, when the company bought back $3.2 billion of if its own stock.

The conglomerate showed a massive cash hoard of $105.4 billion at the end of June even though the giant has been more active in deal-making and picking stocks.

The “Oracle of Omaha” has been steadily adding to his Occidental Petroleum stake since March, giving Berkshire a 19.4% Occidental stake worth about $10.9 billion. Occidental has been the best-performing stock in the S&P 500 this year, more than doubling in price on the back of surging oil prices.

In late March, the company said it agreed to buy insurer Alleghany for $11.6 billion — marking Buffett’s biggest deal since 2016.

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Berkshire Hathaway (BRK) earnings Q1 2022

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Warren Buffett

Gerry Miller | CNBC

Warren Buffett’s Berkshire Hathaway reported Saturday a decline in first-quarter earnings, as the conglomerate was not immune to a slowing U.S. economy.

The company’s net earnings came in at $5.46 billion, down more than 53% from $11.71 billion in the year-earlier period.

Berkshire’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — were flat year over year at $7.04 billion. This comes amid a sharp drop in the company’s insurance underwriting business; earnings from the segment dropped nearly 94% to $47 million from $764 million in the year-earlier period.

Earnings from Berkshire’s manufacturing, service and retailing segment jumped 15.5% to $3.03 billion in the quarter, while railroad and utilities earnings increased slightly.

Those operating results came as the U.S. economy contracted in the first quarter for the first time since the onset of the Covid-19 pandemic.

The company also took a big hit from its investments, reporting a loss of $1.58 billion amid a broader market decline. To be sure, Buffett always advises shareholders to ignore these quarterly investment fluctuations.

“The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said in Saturday’s release.

Berkshire’s stock buybacks also slowed down to $3.2 billion from $6.9 billion in the fourth quarter of 2021, as the company was more active with dealmaking last quarter than it had been for a long time.

In late March, the company said it agreed to buy insurer Alleghany for $11.6 billion — marking Buffett’s biggest deal since 2016. Berkshire also unveiled a stake in oil giant Occidental Petroleum that’s now worth more than $7 billion, along with a position in HP Inc that’ now valued at more than $4.5 billion.

Despite the tough environment, Berkshire as an investment has been stellar this year. The conglomerate’s Class A stock is up more than 7% for the year — outperforming the S&P 500, which is down 13.3% for 2022. While down from the fourth quarter, the company still showed a massive cash hoard of $106.3 billion as of the end of the first quarter.

The company’s latest quarterly figures come as thousands flocked to Omaha, Nebraska for Berkshire’s annual meeting, where Buffett and Vice Chairman Charlie Munger will take questions from shareholders. (CNBC will host the exclusive livestream on Saturday starting at 9:45 a.m. ET.)

Some of the topics Berkshire shareholders will want the pair to discuss include their market outlook — given the recent inflationary pressures and rising rates — as well as more clarity on the company’s succession plan.

Check out all of the CNBC Berkshire Hathaway annual meeting coverage here.

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Berkshire Hathaway BRK earnings Q4 2021

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Berkshire Hathaway Chairman and CEO Warren Buffett.

Andrew Harnik | AP

Berkshire Hathaway’s operating profits surged in the fourth quarter and for the full year as the conglomerate’s businesses continued to roar back to life from the pandemic economic slowdown. Chairman Warren Buffett increased his bet on that comeback, buying back a record amount of Berkshire shares in 2021.

The company’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — totaled $7.285 billion in the fourth quarter of 2021, according to a company release posted Saturday. That’s up roughly 45% from the year-earlier period’s profit of $5.021 billion.

For the year, Berkshire’s operating earnings totaled $27.455 billion. That’s up 25.2% from 2020’s $21.992 billion.

Berkshire used $6.9 billion to buy back shares in the fourth quarter, bringing the total in share repurchases to approximately $27 billion for 2021. That’s a record amount and up from the $24.7 billion repurchased as the pandemic raged in 2020. However, the fourth-quarter buyback pace was a bit slower than the $7.6 billion repurchased in the third quarter.

Despite these aggressive buybacks, Berkshire’s cash hoard at the end of 2021 stood at about $146.72 billion. That’s down only slightly from a record $149.2 billion at the end of the third quarter.

Buffett explained in his accompanying annual shareholder letter that he and Vice Chairman Charlie Munger found little that “excites” them in terms of big acquisitions that was once their hallmark. Instead, the pair increasingly finds share repurchases as the best way to deploy cash at this time.

“Through that simple act, we increase your share of the many controlled and non-controlled businesses Berkshire owns,” Buffett wrote in the letter. “When the price/value equation is right, this path is the easiest and most certain way for us to increase your wealth.”

Overall earnings, which reflect Berkshire’s fluctuating equity investments, came in at $39.646 billion for the quarter. That’s up about 10% from the year-earlier period of $35.835 billion.

However, Berkshire tends to downplay the importance quarterly changes in the company’s investment gains or losses.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said.

Earnings from Berkshire’s railroad, utilities and energy business jumped 12.3% to $2.241 billion from $1.995 billion a year earlier. Meanwhile, Berkshire’s insurance-underwriting business earned $372 million after losing $299 million in the fourth quarter of 2020.

The earnings report came as Berkshire’s B shares broke out to a record high this year, up nearly 7%.

Full-year overall earnings came in at $89.795 billion, more than double 2020’s total of $42.521 billion.

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Business

Berkshire Hathaway BRK earnings Q3 2021

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Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.

Gerard Miller | CNBC

Berkshire Hathaway saw another double-digit increase in its operating profit thanks to a continuous rebound in it railroad, utilities and energy businesses from the pandemic, while the company’s cash pile hit a record high as Warren Buffett continued to sit on the sidelines.

The conglomerate reported operating income of $6.47 billion in the third quarter, rising 18% from $5.48 billion in the same quarter a year ago, according to its earnings report released on Saturday.

Berkshire said its myriad of businesses has benefited from the economic reopening as demand started to return to pre-pandemic levels. Operating earnings from its railroad, utilities and energy segment grew 11% year over year to $3.03 billion in the third quarter.

“Beginning in the third quarter of 2020, many of our businesses experienced significantly higher sales and earnings relative to the second quarter, reflecting higher customer demand,” Berkshire said in the report. “The extent of the effects over longer terms cannot be reasonably estimated at this time.”

At the end of September, Berkshire’s cash pile reached a record $149.2 billion, up from $144.1 billion in the second quarter. Buffett hasn’t made a sizable acquisition in the last few years as valuations hit record highs and the deal-making environment turned competitive.

The record amount of cash came despite Berkshire’s aggressive share buybacks. The company repurchased $7.6 billion of its own stock in the third quarter, bringing the nine month total to $20.2 billion. Berkshire bought a record $24.7 billion of its own stock last year.

Overall earnings, which reflect Berkshire’s fluctuating equity investments, fell to $10.3 billion in the third quarter, marking a more than 60% decline year over year. The return from Berkshire’s equity investments only totaled $3.8 billion last quarter, compared to a $24.8 billion gain a year ago.

Buffett stressed that investors shouldn’t put much emphasis on the quarterly changes in its investment gains or losses.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” the conglomerate said in the quarterly report.

Berkshire’s B shares are up more than 24% this year, sitting about 2% below its record high reached in May.

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