Berkshire Hathaway Posts 34% Rise in Operating Profit as Cash Balance Hits Record $381.6 Billion

Berkshire Hathaway reported a significant improvement in third-quarter performance, with operating earnings rising 34% year over year and cash holdings reaching an all-time high. The conglomerate registered stronger results in its insurance segment and refrained from executing share repurchases, allowing liquidity to build to $381.6 billion.

Operating performance

For the three months ended Sept. 30, operating profit from Berkshire’s wholly owned subsidiaries totaled $13.485 billion, compared with $10.071 billion in the same period a year earlier. The insurance group delivered the largest contribution, as underwriting income surged more than 200% to $2.37 billion. Railroad, energy and other industrial units also added to the gains, though at a more moderate pace.

Including investment and derivative results, overall earnings rose 17% to $30.8 billion. These headline figures incorporate unrealized gains and losses from Berkshire’s equity portfolio, a source of volatility the company traditionally advises investors to evaluate separately from core operations.

Share repurchases and equity activity

Despite a pullback in Berkshire’s share price during 2025, the company did not repurchase any Class A or Class B stock in the first nine months of the year. The absence of buybacks contrasts with previous periods in which chairman Warren Buffett allocated billions to that use of capital. According to filings with the U.S. Securities and Exchange Commission, Berkshire was a net seller of equities in the third quarter, generating a taxable gain of $10.4 billion.

Year to date, both share classes have appreciated about 5%, trailing the S&P 500’s 16.3% advance over the same interval.

Record cash holdings

The decision to forego share repurchases and limit new stock investments left Berkshire with $381.6 billion in cash and equivalents at quarter-end, eclipsing the prior record of $347.7 billion reached in the first quarter of 2025. The growing reserve underscores the company’s cautious stance amid elevated equity valuations and a shifting interest-rate environment.

Leadership transition

In May, Buffett announced plans to step down as chief executive at the end of 2025 after approximately 60 years in that role. Greg Abel, vice chair responsible for non-insurance operations, will assume the CEO position while Buffett remains board chairman. Abel is scheduled to begin writing the firm’s widely read annual shareholder letters in 2026.

The stock has declined by double-digit percentages from its record high since the leadership change was made public, reflecting the market’s recalibration of the so-called “Buffett premium,” or the extra valuation attributed to the 95-year-old investor’s capital-allocation track record.

Recent acquisition activity

Although Berkshire moderated share repurchases, it pursued strategic acquisitions. In October, the company agreed to purchase Occidental Petroleum’s petrochemical division, OxyChem, for $9.7 billion in cash. The transaction is Berkshire’s largest since the $11.6 billion purchase of insurer Alleghany in 2022 and expands the conglomerate’s footprint in the chemicals sector.

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Segment highlights

Insurance: Underwriting gains improved markedly due to lower catastrophe losses and better pricing across property-casualty lines. Investment income within the insurance portfolio also benefited from higher short-term interest rates.

Railroad: BNSF Railway posted modest earnings growth, supported by efficiency initiatives that offset mixed freight volumes across consumer, agricultural and industrial commodities.

Energy and utilities: Earnings from Berkshire Hathaway Energy were stable as regulated rate structures mitigated the impact of rising fuel costs. Ongoing capital projects in renewables and transmission continued as planned.

Manufacturing, service and retail: Results were mixed across the diverse collection of businesses in this category. Strength in building-products operations balanced softer demand in consumer-facing units.

Outlook

Berkshire offered no formal guidance but emphasized its willingness to deploy capital when valuations align with internal return thresholds. The enlarged cash position provides flexibility for additional acquisitions, equity investments or future buybacks, depending on market conditions.

Crédito da imagem: David A. Grogen | CNBC