Berkshire Hathaway has ramped up its stock repurchases, as new CEO Greg Abel shows a greater inclination than his predecessor, Warren Buffett, to deploy the conglomerate’s massive cash reserves.
The Omaha-based firm reported on Saturday (Nov 7) that its third-quarter profit declined, with operating earnings falling 6 per cent to US$12.71 billion and net earnings dropping 28 per cent to US$22.11 billion. These figures reflect downturns in insurance units like Geico, alongside reduced gains from common stock investments.
Berkshire disclosed that it bought back US$9.6 billion of its own shares between July and September, followed by approximately US$2 billion more in October, building on the US$4.8 billion repurchased earlier in 2026.
This marks the third quarter since 64-year-old Abel took over as chief executive. Buffett, 96, had struggled to identify acquisition targets toward the end of his six-decade tenure. He now serves as chairman emeritus, following his son Howard Buffett’s appointment as chairman in September.
Following these buybacks, Berkshire concluded September with US$356.9 billion in cash and equivalents, a decrease from the US$380.2 billion held six months prior. The company’s record year for buybacks remains 2021, when it repurchased US$27 billion in stock.
Berkshire operates a diverse array of businesses, including various insurers and reinsurers, the BNSF railroad, utility providers, manufacturing and industrial firms, and retail brands such as See’s Candies, Fruit of the Loom, and Brooks running shoes. As of Sept 30, it also held US$335.5 billion in stocks, including positions in American Express, Apple, and Alphabet.
Many inflation and high gas prices are constraining consumer spending power.
Berkshire noted that “considerable uncertainty” persists regarding geopolitical and economic factors, such as wars and tariffs, with several retail divisions reporting “sluggish” demand due to this climate and its effect on consumer sentiment.
Berkshire Hathaway looks to keep culture intact as Howard Buffett ascends
Warren Buffett steps down as Berkshire chair and names son to replace him
Berkshire accelerates buybacks, lowers cash stake as profit tops forecasts
Nevertheless, shares of Berkshire—which holds several companies that benefit from rising electricity and gasoline costs—hit record highs this week, even as the wider market faced a sell-off fueled by investor anxiety over debt-heavy tech spending and artificial intelligence.
Since the end of September, Berkshire’s stock has outperformed the S&P 500 by more than 18 percentage points, reversing a trend of significant underperformance that followed Buffett’s May 2025 announcement that he would step down as CEO. For the entirety of 2026, Berkshire has outpaced the index by more than 5 percentage points.
Cathy Seifert, an analyst at CFRA Research who maintains a “hold” rating on Berkshire, noted that the company’s share repurchases, diversification, and balance sheet strength provide significant support.
“Investors may be rotating into less volatile, high-quality names such as Berkshire,” Seifert said. “The question is how much investors will accept short-term shortfalls in exchange for owning a company with a strong balance sheet and which successfully transitioned to a post-Buffett era.”
Support for AI
Berkshire’s third-quarter operating profit of US$12.71 billion, or roughly US$8,954 per Class A share, was down from US$13.49 billion in the same period last year. Profits from insurance dropped 26 per cent, while underwriting profits fell 43 per cent.
The US$22.11 billion in net income included unrealised losses and gains on stocks that the company is not currently selling. Berkshire advises investors to disregard the volatility caused by these figures.
Revenue climbed 11 per cent to US$105.65 billion, marking two consecutive quarters of double-digit growth, despite downturns in consumer-facing businesses like Forest River RVs and Fruit of the Loom underwear.
The results were influenced by 2026 acquisitions, including the US$9.4 billion purchase of Occidental Petroleum’s chemicals unit and the US$6.8 billion buyout of home builder Taylor Morrison.
Berkshire has also invested billions in Alphabet shares to support the Google parent’s expansion into AI, although the stock is currently trading below the discounted prices Berkshire paid. Additionally, the company acquired a 4 per cent stake in the Italian software firm Bending Spoons.
BNSF, energy, industrial businesses fare better
Geico’s 45 per cent pre-tax profit decline was a result of the company’s decision to lower premiums to win back customers lost during a multi-year effort to reduce overhead and improve underwriting quality.
The insurer’s loss ratio, representing the portion of premiums used to cover claims, climbed to 76.6 per cent from 71.5 per cent a year earlier. Claims also increased across other Berkshire reinsurance and insurance units.
Seifert described Geico’s performance as weak compared to rivals like Progressive and Allstate. She also noted that Berkshire’s limited financial disclosures, a long-standing concern for analysts, make it difficult to identify specific issues and their solutions.
“Limited disclosures are fine when everything goes in the right direction, but become a point of vulnerability” when they do not, she said.
Profit at BNSF grew 19 per cent, driven by higher volumes of energy, agricultural, and consumer products, as well as fuel surcharges.
Berkshire Hathaway Energy, which includes natural gas pipelines, utilities, and the company’s namesake real estate brokerage, saw profits rise 8 per cent.
Industrial units performed well, with Precision Castparts seeing a 30 per cent increase in pre-tax profit, aided by sales in aerospace and industrial gas turbines.
Profit from consumer products businesses fell, largely due to lower tax credits at Duracell, while the Pilot truck stop chain benefited from higher gasoline prices.
