Berkshire Hathaway boosts buybacks as operating profit falls 6%
New CEO Greg Abel accelerated stock repurchases to US$9.6 billion in Q3, but operating profit dropped 6 per cent to US$12.71 billion amid a 26 per cent decline in insurance earnings. The conglomerate also invested billions in Alphabet shares to support AI expansion.
Berkshire Hathaway accelerated stock repurchases in the third quarter, as new chief executive Greg Abel demonstrated a greater willingness to deploy the conglomerate's enormous cash hoard than his predecessor Warren Buffett. The Omaha, Nebraska-based group said on 8 November that it bought back US$9.6 billion of stock in the July-September period, on top of US$4.8 billion earlier in the year and about US$2 billion more in the first four weeks of October.
The buybacks came despite lower results from Berkshire's insurance business, which weighed on overall profit. Buffett, 96, who stepped down as CEO at the end of 2025 but remains chairman emeritus, had difficulty finding acquisitions toward the end of his 60-year tenure. The third quarter was the third since Abel, 64, became chief executive. Berkshire ended September with US$356.9 billion of cash and equivalents; its biggest year for buybacks was 2021, when it repurchased US$27 billion of stock.
Quarterly operating profit fell 6 per cent from a year earlier to US$12.71 billion, or about US$8,954 per Class A share. Insurance was a major reason for the decline, as profit fell 26 per cent. Underwriting profit fell 43 per cent, and included a 45 per cent pretax decline at the Geico insurer, where accident losses and advertising spending increased. Net income fell 28 per cent to US$22.11 billion, including unrealised gains and losses on stocks Berkshire still owns; the group urges investors to ignore volatility from changes in the values of stocks it is not selling.
Revenue increased 11 per cent to US$105.65 billion, the second straight quarter of double-digit percentage growth, despite declines in some consumer businesses such as Fruit of the Loom underwear and Forest River RVs. While the US economy grew at an annualised 3.4 per cent rate in the third quarter, according to the advance estimate of the Commerce Department's Bureau of Economic Analysis, elevated inflation and gas prices are dampening consumers' ability to spend. Berkshire maintained that "considerable uncertainty" remains about the outcomes of economic and geopolitical events, including tariffs and wars.
Berkshire's purchases this year have included billions of dollars of Alphabet shares to help Google's parent expand in artificial intelligence, though the stock trades below discounted prices that Berkshire paid. Abel also spent US$6.8 billion in July to buy home builder Taylor Morrison, and Berkshire has taken a 4 per cent stake in Italian software technology company Bending Spoons. Despite the AI investments, many investors still view Berkshire as a collection of more traditional businesses that together resemble the broader economy. Berkshire's share price reached record highs this week despite a broader market selloff as investors worried about AI and debt-fueled spending by technology companies. Through Friday, Berkshire's shares have risen more than 13 per cent in 2026, outpacing the S&P 500 by more than five percentage points.