Warren Buffett's Berkshire Hathaway sees cash pile at record high of $382 billion, earnings soar
Warren Buffett’s Berkshire Hathaway saw its cash pile swell to a record high in the third quarter of the ongoing fiscal year as the conglomerate declared its Q3 results on Saturday, signalling that it remained cautious about the markets amid trade uncertainty and other factors.
Berkshire Hathaway’s cash pile soared to $381.7 billion in the quarter gone by, the company said while declaring its Q3 report on Saturday — its last earnings report before Warren Buffett bows out as chief executive.
This means that the conglomerate sold more stocks than it bought for its $283.2 billion equity portfolio for 12 consecutive quarters.
The report also revealed that Berkshire did not repurchase any of its own stocks, even though the company’s share prices have significantly lagged the broader market. This marks the fifth straight quarter since Berkshire brought any of its stocks without buybacks.
The filings, published on Saturday, further showed that Berkshire Hathaway offloaded $6.1 billion of shares during the period.
Earlier this year, Warren Buffett did seemed to be back on the hunt for striking deals, acquiring a $1.6 billion stake in UnitedHealth Group and announcing a $9.7 billion offer to buy OxyChem last month.
Since Buffett announced his exit as CEO in May, Berkshire Hathaway stock price has fallen 12%.
Berkshire Hathaway Q3 report
Berkshire Hathaway posted an operating profit of 34% to $13.49 billion in the third quarter an increase in insurance underwriting profit, beating experts’ forecasts.
The company’s net income increased 17% to 30.8 billion, while net investment income fell by 13% to $3.2 billion amid lower short-term interest rates despite Warren Buffett offloading his shares.
The firm’s collection of primary insurance and reinsurance businesses both turned a pretax underwriting profit this quarter, after posting losses in the year-ago period.
Revenue of the company saw a slowed growth at 2%, which was slower than the US’ economic growth rate.
Berkshire noted that economic uncertainty and waning consumer confidence had been the drags that slowed revenue growth.
Warren Buffett bows out
At 95, Warren Buffett is letting the cash pile at Berkshire Hathaway increase as he prepares to step down from the post of CEO, a role that he has held for six decades.
Vice Chairman Greg Abel will take on the reins, although Buffett will remain Chairman of the company.
However, it is not clear what Abel will do with the cash that sits at Berkshire right now, with options potentially including paying the $1.03 trillion conglomerate’s first dividend since 1967.
Omaha, Nebraska-based Berkshire Hathaway is a company that analysts closely watch for earnings, thanks to its stable business with a diverse portfolio including insurance, rail, energy and manufacturing — providing a mirror of the health of the US economy.