US investment company Berkshire Hathaway increased its operating profit by 34 percent year-on-year to $13.49 billion (CZK 284.9 billion) in the third quarter. Cash holdings climbed to a record $381.7 billion, the company said today in a report to the stock market. This is the last earnings report before Warren Buffett steps down as head of the company.
Caution regarding stock valuation
Underwriting activities in the conglomerate’s insurance operations contributed to the improvement in third-quarter performance. The company also signaled that it remains cautious about markets and stock valuations, with Berkshire not repurchasing any of its shares during the period.
Operating earnings per Class A share rose to approximately $9,376 in the third quarter. Total net income, including gains and losses on Berkshire’s investments in common stock of companies such as Apple, rose 17 percent to $30.8 billion. That’s $21,413 per Class A share. These shares closed the third quarter at $754,200.
Between July and September, Buffett’s conglomerate sold more shares than it bought for the twelfth consecutive quarter. The value of the stock portfolio is around $283.2 billion and, in addition to Apple shares, it includes American Express shares, for example.
Preparing for the end of Warren Buffett’s tenure
The 95-year-old Buffett is accumulating cash and preparing to step down as CEO. He plans to leave at the end of this year, after roughly 60 years at the helm of Berkshire. The new CEO will be 63-year-old Greg Abel, who is currently vice chairman of the board. Buffett will remain only as chairman. Abel is considered a more practical manager than Buffett, according to Reuters. It is not yet clear how he might start using the accumulated cash, but it is possible that the company could start paying dividends for the first time since 1967.
Berkshire Hathaway is based in Omaha, Nebraska, and controls dozens of subsidiaries operating in various industries. It also owns significant stakes in a number of well-known companies around the world. Buffett has been running the company since 1965, is one of the richest people in the world, and has earned the nickname “The Oracle of Omaha” thanks to his successful investments.
Source: ČTK
