Berkshire Says It Bought Back Nearly $1 Billion of Its Own Stock

Berkshire Says It Bought Back Nearly $1 Billion of Its Own Stock

Berkshire Hathaway, the conglomerate run by the billionaire Warren Buffett, said on Saturday that its operating profit in the third quarter nearly doubled as its insurance business dodged hurricanes and benefited from lower taxes.

The strong result gave Mr. Buffett more cash to deploy, and he used some of it to buy back nearly $1 billion of his own company’s stock.

Operating profit in the quarter doubled to $6.88 billion from $3.44 billion a year earlier, higher than the $6.11 billion expected by Wall Street, according to data from Refinitiv.

The company’s insurance operations were helped by lower estimated liabilities from property and casualty insurance than in prior years, and by lower taxes. The insurance companies’ bottom lines last year were hit by major losses as a result of three hurricanes in the United States and an earthquake in Mexico.

Insurance underwriting income was $441 million in the third quarter, compared with a loss of $1.4 billion in the same period a year ago.

Berkshire’s results also improved across its railroad, utilities and energy, manufacturing, service and retailing and financial-products businesses.

“This is absolutely one of the biggest quarterly earnings reports that has ever come out of a United States corporation,” said Bill Smead, chief executive of Smead Capital Management in Seattle, a Berkshire shareholder.

Berkshire said its third-quarter net income rose more than 355 percent to $18.5 billion, though that reflected a new accounting rule requiring it to report unrealized investment gains with earnings.

Berkshire also said it had bought $928 million of its own shares in the third quarter.

Berkshire ended September with $103.6 billion in cash, short-term Treasuries and other similar investments.

Mr. Buffett’s last big acquisition was in January 2016, when Berkshire paid about $32 billion for the aircraft parts maker Precision Castparts.

Berkshire’s Class A shares closed Friday at $308,411.01 a share, delivering a total return of 3.6 percent for the year, a bit ahead of the 3.4 percent return of Standard & Poor’s 500-stock index.

Mr. Smead said it made sense for Mr. Buffett to buy back stock.

“He is the most successful value investor of all time, and his company’s stock in relation to book value is at an extreme value in a world where value is incredibly attractive.”

Source link

About The Author

Momizat Team specialize in designing WordPress themes ... Momizat Team specialize in designing WordPress themes

Related posts

Leave a Reply