Berkshire's Q3 profit drops to $22.1 billion despite $9.6 billion in buybacks

Berkshire Hathaway reported a net profit of $22.1 billion for the third quarter, a decline of more than 28% from the same period last year. The conglomerate repurchased $9.6 billion of its own shares during the quarter. The drop in earnings reflects changes in the value of its investment portfolio. Operating earnings also slipped nearly 6% to $12.7 billion.

The company’s massive cash reserves increased during the quarter. The pile reached $377.4 billion, up from $365.5 billion at the end of June. The cash accumulation signals that the firm is holding onto capital rather than deploying it in new acquisitions or buybacks. This growth in liquidity occurred even as the firm returned cash to shareholders through share repurchases.

Geico, one of Berkshire’s largest insurance units, posted weaker results. The insurer generated $982 million in underwriting profit this year, down from $1.77 billion a year ago. Total underwriting profit across all of Berkshire’s insurers fell to $1.35 billion from $2.37 billion in the previous year. Geico accounted for the majority of that underwriting income.

Cathy Seifert, an analyst at CFRA Research, noted that Geico faces rising claim costs while premiums are declining. She stated that the insurer is in a tough spot under these market conditions. The shift in insurance economics pressured the bottom line for the company’s insurance division. This performance lagged behind other parts of the conglomerate.

Chris Ballard, a managing director at Check Capital, viewed the Geico numbers as expected. He explained that the company is investing in its marketing, including its famous spokeslizard, to attract new customers. Ballard said that aggressive policy writing often pressures auto insurer profits. He noted that Progressive, a competitor, had cut advertising for a long period, allowing it to see stronger results previously.

Ballard told ABC News, “It should be looking better. Progressive is doing better, but they were doing so well for so long. They had cut their advertising for quite a while there, so we've been kind of expecting this on our end.” He added that his firm, which holds Berkshire stock, anticipated the current financial picture.

Noninsurance businesses under the direction of CEO Greg Abel showed different results. Seifert observed that units such as Precision Castparts, the utilities, and BNSF railroad seem to be performing better than the insurance unit. This is the case even without major hurricanes or other catastrophes affecting the year. Seifert commented, “I think we’re seeing the businesses that play to Greg’s strengths do well. But the question is what about the rest of the franchise.”

Berkshire’s Class A stock price recently surged past $878,000. This level topped the price from before Warren Buffett announced his retirement plans at the annual meeting in May 2025. Buffett relinquished the chairman title in September after handing the CEO role to Abel in January. The recent stock surge likely paused the aggressive buyback activity seen in the third quarter.

Analysts surveyed by FactSet Research had predicted operating earnings of $8,821.84 per Class A share. Berkshire reported $8,907 per Class A share, beating that estimate. The company reported $15,502 per Class A share in net income. Last year’s third quarter figures were $21,413 per share in net income and $9,376.15 per share in operating earnings.