Warren Buffett’s cash pile tops record with $149.2 billion on hand
Warren Buffett’s Berkshire Hathaway Inc. now has a record amount of money to put to work.
Berkshire’s cash pile hit new heights at $149.2 billion of funds in the third quarter, surpassing a record set in early 2020, the company said in its earnings report Saturday. The fresh high came even as Buffett poured more money into buying back its own stock with $7.6 billion of repurchases in the period — the third-highest tally since the board changed its policy on buybacks in 2018.
Buffett has struggled with a high-class problem of having too much money in Berkshire’s pockets and not enough chances to put that to work in higher-returning assets. With no major deals in recent quarters, Berkshire’s chief executive officer has frequently turned to buybacks as one way to deploy the cash deluge. But even the heightened level of buybacks during the third quarter wasn’t enough to keep Berkshire’s coffers from swelling.
The sprawling conglomerate has benefited as many of its vast array of businesses bounced back from the initial throes of the pandemic, which helped boost operating profit 18% in the third-quarter. Berkshire’s railroad generated record earnings even as the industry grappled with supply chain pressures, while the company’s energy businesses posted their highest profit in data going back to mid-2009.
Buffett’s company was helped by strong consumer demand for products, but warned in its report that “several of our businesses experienced higher materials, freight and other input costs attributable to ongoing disruptions in global supply chains.” Its collection of manufacturing, servicing and retailing operations posted the third-highest level of profit in data going back to the middle of 2009, an increase of 15% compared to the year-ago period.
graph
That strength helped compensate for a weak quarter for Berkshire’s insurers. The underwriting loss at that group of businesses widened to $784 million during the third quarter, with all three of its major insurance groups reporting losses in underwriting. Catastrophe losses, including the sting of Hurricane Ida, totaled $1.7 billion after taxes during the period. Geico, meanwhile, is feeling the pressure as more drivers hit the road, leading to an increased frequency of claims. The severity of claims is also rising just as used car prices tick up.
Berkshire’s net income fell 66% to $10.3 billion during the third quarter compared to the same period a year earlier, according to the company’s statement. That figure includes swings in the conglomerate’s nearly $311 billion stock portfolio. The business’s Class A shares were down just slightly, a 1.7% decrease, during those three months ended September 30
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
