Analysis
Berkshire Bought Back $9.6B of Stock as Operating Profit Fell
Berkshire Hathaway bought back about $9.6 billion of stock in the third quarter, double the second quarter, while operating earnings fell 5.8%.
Greg Abel's Berkshire Hathaway is buying its own shares faster than at any point this year. In results published on Saturday, November 7, the conglomerate said it repurchased about $9.6 billion of stock in the third quarter, up from about $4.5 billion in the second and roughly $14.4 billion over the first nine months of 2026, after buying back nothing at all in 2025. The number of Class A equivalent shares outstanding has fallen about 1.3% since December.
The buybacks arrived alongside weaker profits. Operating earnings, the figure Berkshire asks investors to focus on, fell 5.8% to $12.705 billion from $13.485 billion a year earlier, CNBC reported. Insurance did the damage: after-tax underwriting profit dropped 43% to $1.352 billion, with GEICO's pre-tax underwriting profit down to $982 million from $1.773 billion, and investment income from the insurers fell 14% to $2.734 billion. A swing in the value of Berkshire's yen and euro debt also took $343 million off the total.
The operating businesses outside insurance grew. BNSF earned $1.729 billion after tax against $1.449 billion, Berkshire Hathaway Energy $1.612 billion against $1.489 billion, and the manufacturing, service and retailing group $4.042 billion against $3.616 billion, helped by the homebuilder Taylor Morrison, bought for about $6.8 billion in cash in July. Net earnings, which include the swings in Berkshire's stock portfolio, fell 28% to $22.112 billion because investment gains were about half of last year's.
The cash figure depends on which line you read. Cash, equivalents and Treasury bills totalled about $377.4 billion at the end of September, up from $365.5 billion in June, according to CNBC. Excluding the cash held by the railroad and the utilities and unsettled Treasury bill purchases, the holding company's figure was $352.3 billion, down 1.9% over the quarter. Berkshire bought about $2.4 billion of stocks and sold about $2.8 billion, a small net sale after net purchases of about $19.8 billion in the second quarter, and its five largest holdings were unchanged.
The shares had already run ahead of the report. Berkshire stock is up about 13% this year against 7.8% for the S&P 500, and the Class A shares rose more than 12% over the past month while the index fell 5.5%, during a stretch in which value stocks held up far better than the AI-heavy growth names that led last week's sell-off. A company that buys back stock after that kind of move is signalling that it still considers the price below intrinsic value, which is the test Berkshire has always set for repurchases; the slump in insurance profits is the reason that view will be tested in the fourth quarter.