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Warren Buffett, CEO of Berkshire Hathaway.
New York CNN –
Warren Buffett’s Berkshire Hathaway on Saturday reported a rise in third-quarter operating profits and a record high cash balance of $157 billion.
Operating income was $10.8 billion, up from $7.7 billion, or an increase of 40.6% year over year.
Berkshire reported a net loss of $12.8 billion, compared with a loss of $2.8 billion in the same period last year.
The Omaha, Nebraska-based conglomerate posted investment losses of $23.5 billion in its most recent quarter, compared with a loss of $10.4 billion a year earlier.
Berkshire’s insurance business posted a profit of $2.4 billion, compared with a loss of $1.1 billion in the year-ago quarter. Insurance investment income rose to $2.5 billion from $1.4 billion in the same period last year.
Geico, owned by Berkshire and one of the country’s largest insurance companies, reported an underwriting profit of $1.053 billion – a significant increase from a loss of $759 million in the third quarter of last year.
Berkshire bought back about $1.1 billion worth of shares in the third quarter, bringing the total share repurchases this year to about $7 billion in the first nine months.
The company’s cash balance rose to $157.2 billion from $147.4 billion in the second quarter of this year.
Buffett rejected Fitch Ratings’ downgrade of U.S. bonds from the highest AAA rating to AA+ earlier this year, telling CNBC on August 3 that Berkshire had bought $10 billion in U.S. Treasuries this week , after doing the same thing a week earlier.
“The only question for next Monday is whether we will buy $10 billion in three months or six months [Treasury notes]” Buffett said at the time.
Treasury yields reached levels not seen in more than a decade in October before falling last week after the Federal Reserve kept interest rates steady for a second straight day.
U.S. stocks have rallied this year on hype over artificial intelligence and hopes that the Fed will soon stop raising interest rates, helping Berkshire recover from last year’s slide as the market plunged .
The company’s operations abroad have also paid off. Berkshire announced in 2020 that it had acquired approximately 5% stakes in each of Japan’s five largest trading companies, representing a total investment of $6.7 billion.
The company doubled its stake in each company this year to an average of over 8.5% as the Japanese stock market rose to its highest level in 33 years.
“It was like God just opened a chest and just poured money into it,” Berkshire Hathaway Vice Chairman Charlie Munger said of the investments in an interview with the Acquired podcast published in October.
Berkshire Hathaway’s Class A shares were up 13.9% for the year as of Friday’s close, underperforming the benchmark S&P 500.