(Bloomberg) – Warren Buffett’s Berkshire Hathaway Inc. now has a record amount of money to put to work.
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Berkshire’s treasury hit new highs with $ 149.2 billion in funds in the third quarter, breaking a record set in early 2020, the company said in its earnings report on Saturday. The new high came even as Buffett poured more money into repurchasing his own shares with $ 7.6 billion in repurchases during the period – the third highest tally since the board of directors held changed its buyback policy in 2018.
Buffett has been grappling with a high class problem of having too much money in Berkshire’s pockets and not enough chances to put it to use in higher yielding assets. With no major deals in recent quarters, the Berkshire chief executive has frequently turned to buyouts as a way to deploy the liquidity deluge. But even the increased level of buybacks in the third quarter was not enough to keep Berkshire’s coffers from swelling.
The sprawling conglomerate took advantage of the fact that many of its many businesses rebounded from the initial throes of the pandemic, which helped boost operating income by 18% in the third quarter. The Berkshire Railway posted record profits even as the industry grappled with supply chain pressures, as the company’s energy businesses posted their highest profits in data dating back to the mid-2009.
Buffett’s business was aided by strong consumer demand for products, but warned in its report that “several of our businesses have experienced higher material, freight and other input costs due to the disruption. ongoing in global supply chains “. Its collection of manufacturing, maintenance and retail operations posted the third highest level of profit in data dating back to mid-2009, an increase of 15% over the same period of the year. last year.
This strength helped offset a weak quarter for Berkshire insurers. This group of companies’ underwriting loss widened to $ 784 million in the third quarter as its three major insurance groups reported underwriting losses. Catastrophic losses, including the sting of Hurricane Ida, totaled $ 1.7 billion after-tax during the period. Geico, meanwhile, is feeling the pressure as more drivers hit the road, leading to an increase in the frequency of complaints. The severity of claims also increases as used car prices rise.
Berkshire’s net profit fell 66% to $ 10.3 billion in the third quarter from the same period a year earlier, according to the company’s statement. That figure includes fluctuations in the conglomerate’s nearly $ 311 billion stock portfolio. The company’s Class A shares fell only slightly, down 1.7%, in the three months ended September 30.
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