Berkshire Hathaway signaled on Saturday that it remained cautious about markets, letting cash swell to a record $381.7 billion even as profit rose, in its last financial report before Warren Buffett bows out as chief executive.
For a 12th straight quarter, Buffett's conglomerate sold more stocks than it bought for its $283.2 billion equity portfolio, whose holdings include Apple and American Express.
Berkshire also did not repurchase any of its own stock, the fifth straight quarter without buybacks, though its stock price has significantly lagged the broader market.
Lower insurance losses helped boost third-quarter operating profit 34% to $13.49 billion, topping analyst forecasts, while net income grew 17% to $30.8 billion.
But revenue grew just 2%, slower than the overall U.S. economy's growth rate.
Economic uncertainty and waning consumer confidence have been drags, Berkshire said, stalling sales growth at the Clayton Homes homebuilder and reducing revenue from Duracell batteries, Fruit of the Loom apparel and Squishmallows toymaker Jazwares.
"Berkshire, which is often considered a microcosm of the U.S. economy, isn't even keeping up," said Cathy Seifert, a CFRA Research analyst with a "hold" rating on Berkshire. "Investors will struggle to find a catalyst for this stock."
BUFFETT PREPARING TO BOW OUT, ABEL TO TAKE OVER
Buffett, 95, is letting cash build up as he prepares to end his six-decade tenure as chief executive at the end of the year.
Vice Chairman Greg Abel, 63, will succeed the legendary investor, though Buffett will remain chairman.
Abel is known as a more hands-on manager than Buffett.
It is unclear what he will do with Omaha, Nebraska-based Berkshire's cash, with options potentially including paying the $1.03 trillion conglomerate's first dividend since 1967. Berkshire is planning to use $9.7 billion of cash to buy Occidental Petroleum's OxyChem chemicals business, a transaction announced on October 2.
James Shanahan, an Edward Jones analyst who upgraded his Berkshire rating to "buy" in September, said the company's resistance to spending more cash during this year's market rally has been disappointing.
"If you feel like stocks are expensive, including your own shares, you're eventually going to be right, but you can be wrong for a long time, and that's what happened here," he said.
NET INCOME RISES, HELPED BY GAINS ON STOCKS
The $13.49 billion quarterly operating profit, or about $9,376 per Class A share, grew from $10.09 billion a year earlier. Currency fluctuations accounted for more than two-fifths of the increase. Results benefited in part from an absence of major catastrophes such as hurricanes.
But the Geico car insurer reported lower gains as it spent more, possibly on advertising, to acquire new policies. Insurance will likely face headwinds as falling interest rates reduce income from Berkshire's cash holdings, which also occurred in the third quarter.
The BNSF railroad boosted profit 6%, citing lower fuel costs and "improved employee productivity."
Meanwhile, a 9% drop in profit at Berkshire Hathaway Energy reflected legal bills from wildfires, and higher costs from natural gas pipelines and Northern Powergrid in Britain.
Berkshire is still evaluating how U.S. President Donald Trump's One Big Beautiful Bill Act signed in July might affect the viability of its renewable energy projects.
The $30.8 billion of net income, or $21,413 per Class A share, rose from $26.25 billion a year earlier.
Net results include gains and losses on stocks Berkshire is not selling. This adds volatility, and Buffett believes such results are useless in understanding his company.
STOCK PRICE LAGS BROADER MARKET
Investors have voted their apprehension about Berkshire's outlook and pending management change by selling its stock. Since Buffett announced on May 3 he would step down, Berkshire's stock price has fallen 12%, and trailed the Standard & Poor's 500 by 32 percentage points.
For all of 2025, Berkshire is 11 percentage points behind the index.
"Impatient investors feel an urgent need for Berkshire to deploy its cash, and have been casting their nets elsewhere," said Tom Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, which invests $10 billion.
Russo has owned Berkshire stock since 1982 and said Berkshire remains "extremely well-positioned" for the long term.
"Berkshire isn't going to deploy capital that won't increase intrinsic value on a per share basis," he said. "Knowing that guides Berkshire means investors won't have to second-guess it."
The conglomerate owns close to 200 businesses that also include chemical and industrial companies, and familiar consumer brands such as Dairy Queen and See's Candies. It has not made a huge acquisition since paying $32.1 billion for aerospace parts maker Precision Castparts in 2016.
"Abel has a tremendous opportunity," Shanahan said.
For a 12th straight quarter, Buffett's conglomerate sold more stocks than it bought for its $283.2 billion equity portfolio, whose holdings include Apple and American Express.
Berkshire also did not repurchase any of its own stock, the fifth straight quarter without buybacks, though its stock price has significantly lagged the broader market.
Lower insurance losses helped boost third-quarter operating profit 34% to $13.49 billion, topping analyst forecasts, while net income grew 17% to $30.8 billion.
But revenue grew just 2%, slower than the overall U.S. economy's growth rate.
Economic uncertainty and waning consumer confidence have been drags, Berkshire said, stalling sales growth at the Clayton Homes homebuilder and reducing revenue from Duracell batteries, Fruit of the Loom apparel and Squishmallows toymaker Jazwares.
"Berkshire, which is often considered a microcosm of the U.S. economy, isn't even keeping up," said Cathy Seifert, a CFRA Research analyst with a "hold" rating on Berkshire. "Investors will struggle to find a catalyst for this stock."
BUFFETT PREPARING TO BOW OUT, ABEL TO TAKE OVER
Buffett, 95, is letting cash build up as he prepares to end his six-decade tenure as chief executive at the end of the year.
Vice Chairman Greg Abel, 63, will succeed the legendary investor, though Buffett will remain chairman.
Abel is known as a more hands-on manager than Buffett.
It is unclear what he will do with Omaha, Nebraska-based Berkshire's cash, with options potentially including paying the $1.03 trillion conglomerate's first dividend since 1967. Berkshire is planning to use $9.7 billion of cash to buy Occidental Petroleum's OxyChem chemicals business, a transaction announced on October 2.
James Shanahan, an Edward Jones analyst who upgraded his Berkshire rating to "buy" in September, said the company's resistance to spending more cash during this year's market rally has been disappointing.
"If you feel like stocks are expensive, including your own shares, you're eventually going to be right, but you can be wrong for a long time, and that's what happened here," he said.
NET INCOME RISES, HELPED BY GAINS ON STOCKS
The $13.49 billion quarterly operating profit, or about $9,376 per Class A share, grew from $10.09 billion a year earlier. Currency fluctuations accounted for more than two-fifths of the increase. Results benefited in part from an absence of major catastrophes such as hurricanes.
But the Geico car insurer reported lower gains as it spent more, possibly on advertising, to acquire new policies. Insurance will likely face headwinds as falling interest rates reduce income from Berkshire's cash holdings, which also occurred in the third quarter.
The BNSF railroad boosted profit 6%, citing lower fuel costs and "improved employee productivity."
Meanwhile, a 9% drop in profit at Berkshire Hathaway Energy reflected legal bills from wildfires, and higher costs from natural gas pipelines and Northern Powergrid in Britain.
Berkshire is still evaluating how U.S. President Donald Trump's One Big Beautiful Bill Act signed in July might affect the viability of its renewable energy projects.
The $30.8 billion of net income, or $21,413 per Class A share, rose from $26.25 billion a year earlier.
Net results include gains and losses on stocks Berkshire is not selling. This adds volatility, and Buffett believes such results are useless in understanding his company.
STOCK PRICE LAGS BROADER MARKET
Investors have voted their apprehension about Berkshire's outlook and pending management change by selling its stock. Since Buffett announced on May 3 he would step down, Berkshire's stock price has fallen 12%, and trailed the Standard & Poor's 500 by 32 percentage points.
For all of 2025, Berkshire is 11 percentage points behind the index.
"Impatient investors feel an urgent need for Berkshire to deploy its cash, and have been casting their nets elsewhere," said Tom Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, which invests $10 billion.
Russo has owned Berkshire stock since 1982 and said Berkshire remains "extremely well-positioned" for the long term.
"Berkshire isn't going to deploy capital that won't increase intrinsic value on a per share basis," he said. "Knowing that guides Berkshire means investors won't have to second-guess it."
The conglomerate owns close to 200 businesses that also include chemical and industrial companies, and familiar consumer brands such as Dairy Queen and See's Candies. It has not made a huge acquisition since paying $32.1 billion for aerospace parts maker Precision Castparts in 2016.
"Abel has a tremendous opportunity," Shanahan said.
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