Berkshire posts record buybacks, but pace slows as shares climb

what happened

Record share repurchases were the highlight of Berkshire Hathaway's third-quarter report, Barron's writes. Operating earnings after tax came to $13 billion, excluding one-time noncash currency losses, down less than 1% from a year earlier and somewhat above Wall Street forecasts. The company bought back $9.6 billion of stock, beating its previous quarterly high of $9 billion in the fourth quarter of 2020. Buybacks slowed to roughly $2 billion in October as the share price rose. After the repurchases and the roughly $7 billion purchase of homebuilder Taylor Morrison, the cash position fell by about $7 billion to $352 billion. The BNSF railroad unit lifted revenue 14% and after-tax earnings 19% to $1.7 billion. Underwriting profit at the insurance operations dropped more than 40% to $1.35 billion, a smaller decline than UBS analyst Brian Meredith had projected.

why it matters

Strong buybacks and better-than-expected results usually support a stock, but the roughly 15% rise since the end of the quarter may limit the reaction, according to the report. The article also flags softening insurance pricing as a risk to future underwriting profit.

market impact

Berkshire shares: strong buybacks and results support the stock, but the recent rally may cap the reaction

• ↔Berkshire Hathaway shares mixed — strong buybacks and results support the price, but the recent rally limits the reaction

tags

instruments