Berkshire buys back $9.6B in shares as earnings fall 5.8%
What's the story
Berkshire Hathaway, led by CEO Greg Abel, reported a 5.8% decline in its third-quarter operating earnings to $12.7 billion. The decline was largely attributed to a 43% drop in insurance underwriting as Geico, its auto insurer subsidiary, witnessed higher losses and increased underwriting costs during the period. Despite the dip in profits, Berkshire Hathaway has been aggressively buying back its own shares and investing heavily in AI. The company repurchased around $9.6 billion worth of its shares in third quarter.
Financial strategy
Cash reserves and stock performance
Berkshire Hathaway's cash reserves have increased from the previous quarter to $377.4 billion at the end of September.
After accounting for $20.5 billion in pending US treasury bill purchases, the company's cash stands at around $357 billion.
Despite a 1% decline in shares during the first nine months of 2026, underperforming against the S&P 500 index, Berkshire Hathaway's A share class has surged nearly 15% since then.
Strategic moves
Investments in AI and Alphabet Inc.
Under the leadership of Abel, Berkshire Hathaway has made significant investments in AI.
The company invested $10 billion in Alphabet Inc.'s AI projects and $930 million in Bending Spoons SpA, an Italian conglomerate that buys established businesses and uses technology to transform them.
These strategic moves highlight Abel's long-term vision for the company amid a growing backlash against data centers and volatility in stock and bond prices.
Business highlights
Gains for BNSF Railway and Berkshire Hathaway Energy
Berkshire Hathaway's BNSF railroad unit saw a 10.5% increase in average revenue per car, driven in part by higher fuel surcharge revenue.
This boosted the unit's profit by 19.3%, a win for CEO Katie Farmer who has been working to improve profitability and catch up with the company's most efficient peers.
Meanwhile, Berkshire Hathaway Energy posted an 8.3% earnings gain to $1.6 billion during the period, driven by higher utilities sales volumes and customer rates in certain territories.