BRK.B Stock: How Did Berkshire Hathaway Perform in Q3 of 2023?
06 November 2023 - 9:15PM
Finscreener.org
Berkshire Hathaway (NYSE:
BRK.A) (NYSE:
BRK.B) announced on
Saturday a significant increase in its operating earnings for the
third quarter, and it also reported a historically high cash
position, as Warren Buffett found limited opportunities for
acquisitions.
The conglomerate, based in Omaha,
saw its operating earnings — which reflect the profits from its
extensive portfolio of fully-owned businesses, including insurance,
railways, and utilities — reach $10.761 billion in the last
quarter. This is an increase of 40.6% over the $7.651 billion
reported in the same period the previous year.
BerkshireU+02019s cash reserves
had surged to a new high of $157.2 billion at the end of Q3,
exceeding the previous record of $149.2 billion set in the third
quarter of the previous year.
Is Warren Buffett Bullish on Treasury
Bonds?
The investment savant from Omaha
has been capitalizing on the rise in bond yields by purchasing
short-term Treasury bills with yields of at least 5%. By the close
of the third quarter, the conglomerateU+02019s holdings in such
investments had ballooned to $126.4 billion, a considerable leap
from roughly $93 billion at the end of the previous
year.
Meanwhile, Berkshire
HathawayU+02019s share buyback program has decelerated even as its
shares soared to unprecedented heights during the quarter. The
company has spent $1.1
billion on share repurchases in Q3, totaling around $7 billion over
the first nine months.
Berkshire’s Class A shares have
witnessed a nearly 14% surge this year. Although they hit a record
high on September 19, the shares have seen a subsequent drop of
about 6% from its peak.
Geico, a standout performer in
BerkshireU+02019s insurance portfolio and a favorite of Buffett
notched another quarter of profit, boasting underwriting earnings
of $1.1 billion. The auto insurer is in the process of
revitalization after ceding some ground to its rival,
Progressive.
BNSF Railway, on the other hand,
faced a 15% drop in profits as it battled against reduced freight
volumes and escalating expenses.
On the investment front,
Berkshire Hathaway reported a considerable loss of $24.1 billion
for the third quarter, a dip largely attributed to the decreased
value of its substantial Apple (NASDAQ: AAPL)
investment. AppleU+02019s stock fell by 11.7% during that period,
although it has since climbed by over 3%.
Berkshire Hathaway counseled its
investors to disregard the short-term volatility of its stock
portfolioU+02019s value.
"The investment gains or losses
recorded in any single quarter are typically inconsequential,
leading to net earnings per share that could be highly deceptive
for investors who are not well-versed in accounting principles,"
the firm advised in its statement.
Despite a notable rise in
operational earnings, the conglomerate did not shy away from
mentioning the ongoing economic distress caused by the pandemic,
along with the challenges posed by geopolitical tensions, supply
chain disruptions, and inflation.
"Our various businesses have been
affected, to different extents, by the efforts of both governments
and the private sector to counteract the negative economic impacts
of the COVID-19 virus and its variants, as well as by the emergence
of geopolitical conflicts, supply chain interruptions, and
governmental measures to curb inflation," Berkshire remarked.
"ItU+02019s not currently possible to accurately forecast the
long-term economic outcomes resulting from these
issues."
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