Berkshire Hathaway (BRK.A/BRK.B), the holding company of famed investor Warren Buffett, has announced that its third-quarter operating profit rose 40% from a year earlier to reach a record $10.8 billion U.S.
The Omaha-based company, which owns a myriad of businesses ranging from the Dairy Queen restaurant chain to Geico insurance and BNSF railroad, reported that its operating profit totaled $10.761 billion U.S. in Q3, a 40.6% increase from $7.651 billion U.S. a year ago.
Berkshire also posted a record amount of cash on hand at the end of the quarter, totaling $157.2 billion U.S. The previous record cash holding was $149.2 billion U.S. set in 2021.
Cash now accounts for 20% of Berkshire’s market capitalization. The company is benefiting from higher short rates with its cash position now earning more than 5% interest.
The record results come as Buffett has been taking advantage of surging bond yields, buying up short-term Treasury bills yielding at least 5% or greater over the past few months.
Berkshire Hathaway held $126.4 billion U.S. worth of U.S. Treasuries as of Sept. 30 this year, up from $93 billion U.S. at the end of 2022.
Geico, Berkshire’s top performing insurance company, reported another profitable quarter with $1.1 billion U.S. of earnings.
However, railroad BNSF posted a 15% decline in earnings as it struggled with lower volumes and higher costs during the third quarter.
As for its massive investment portfolio that is worth $345 billion U.S., Berkshire Hathaway posted a significant loss of $24.1 billion U.S. as stocks declined between July and September.
Much of the investment loss stemmed from Berkshire’s big stake in Apple, which comprises nearly half of its portfolio. Apple’s share price fell 11.7% during the quarter.
Berkshire reduced its stake in oil major Chevron (CVX) by about 10% to 110 million shares worth $18.6 billion U.S. in Q3. Berkshire’s stake in Apple was unchanged at 915 million shares worth $156.8 billion U.S.
Berkshire Hathaway was a net seller of about $23 billion U.S. worth of stocks in Q3. As usual, Buffett asked investors to look past the quarterly fluctuations in his investment portfolio, saying that short-term performance is meaningless.
Berkshire’s repurchases of its own stock slowed during Q3 as its share price hit a record high. The company spent $1.1 billion U.S. to repurchase shares in the quarter, bringing the nine-month total to $7 billion U.S.
Berkshire Hathaway’s Class B stock has increased 21% over the last 12 months and now trades at $351.81 U.S. per share.