Berkshire Hathaway's cash tops $325B as Buffett sells more stock
What's the story
Warren Buffett's Berkshire Hathaway has posted a record cash reserve of $325.2 billion for Q3 2024.
The massive jump comes as Buffett strategically avoided major acquisitions and trimmed some of his biggest equity stakes, including a major cut in the company's stake in Apple.
At the end of this quarter, Berkshire Hathaway's stake in Apple was worth $69.9 billion, down from $84.2 billion in Q2 2024.
Stake reduction
Berkshire Hathaway trims Apple stake by 25%
Berkshire Hathaway has cut its stake in Apple by some 25%.
The company first revealed its investment in the tech giant in 2016, with an initial investment of $31.1 billion for over 908 million shares.
Even after selling over 600 million Apple shares this year, it remains Berkshire's largest stock holding.
Buffett had previously called Apple an "even better" business than others Berkshire-owned companies like American Express and Coca-Cola.
Share sales
Berkshire Hathaway's net share sales and cash deployment
In Q3, Berkshire Hathaway reported net share sales of $34.6 billion.
The company has been struggling with how to best use its increasing cash reserves, with Buffett deeming current market prices too high for attractive deals.
Despite this, Buffett assured shareholders at the annual meeting in May that the company isn't rushing to spend unless it finds an opportunity with minimal risk and high profit potential.
Stock performance
Berkshire Hathaway's stock repurchase and market value
Buffett has utilized a portion of Berkshire Hathaway's cash reserves to repurchase some of its own stock, a practice that has become costlier of late.
The company's shares have jumped 25% this year, raising its market value to $974.3 billion. On August 28, the firm's market cap exceeded $1 trillion for the first time ever.
However, for the first time since altering its policy in 2018, Berkshire Hathaway didn't repurchase any of its own stock in Q3 2024.
Financial performance
Berkshire Hathaway's insurance underwriting earnings and stock sales
Berkshire Hathaway's earnings from its insurance businesses' underwriting activities dropped 69% to $750 million, down from $2.4 billion a year ago. The decline was largely attributed to higher losses at Berkshire Hathaway Primary Group.
It sold $36.1 billion worth of stocks, including several billion dollars of Bank of America shares, and bought just $1.5 billion worth during Q3 2024, marking the eighth consecutive quarter it was a net seller of stocks.
Earnings report
Berkshire Hathaway's operating earnings and net income
Berkshire Hathaway's Q3 2024 operating earnings fell 6% year-on-year to $10.09 billion.
The decline was primarily attributed to insurance underwriting losses (including Hurricane Helene) and currency losses due to a strengthening US dollar.
However, the company's net income remained strong at $26.25 billion, reflecting unrealized gains on its stock investments (like Apple).
The firm also anticipates pre-tax losses of $1.3-1.5 billion in Q4 2024 due to Hurricane Milton's impact on Florida in October.