Berkshire Hathaway’s operating earnings jump 20%, conglomerate buys back another $1 billion in stock

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.