Berkshire Hathaway Q3 operating earnings slip by

Paul Morigi

Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) Q3 operating earnings sank by 20% from the year-ago quarter as its insurance underwriting loss increased and railroad profit slipped by 6%.

The company bought back ~$1.05B of its common stock during the quarter, compared with ~$1.0B in Q2 and $3.2B in Q1.

The investment behemoth that Warren Buffett built held ~$109.0B of cash and short-term securities as of Sept. 30, 2022, up from the $105.4B it held on June 30.

Q3 operating earnings of $7.76B fell from $9.28B in Q2 and increased from $6.47B in Q3 2021.

Insurance float was ~$150B at Sept. 30, 2022 compared with ~$147B at June 3

Total revenue rose to $76.9B in the quarter from $76.2B in the prior quarter and from $70.6B a year earlier.

Investment and derivative losses of $10.4B in Q3 2022 narrowed from the $53.0B loss in the prior quarter and contrasted with a gain of $3.88B in the year-ago quarter. That resulted in a Q3 net loss of $1.83B, compared with a net loss of $43.8B in Q2 and net earnings of $6.88B in Q3 2021.

Its investments in equity securities amounted to $306.2B in fair value at Sept. 30, 2022 vs. $350.7B in fair value at Dec. 31, 2021. Some 73% of the aggregate fair value was concentrated in five companies — American Express (AXP) at fair value of $20.5B; Apple (AAPL) at $126.5B; Bank of America (BAC) at $31.2B; Coca-Cola (KO) at $22.4B and Chevron (CVS) at $24.4B.

The fair value of its holdings in Kraft Heinz stands at $10.9B and in Occidental Petroleum (OXY) stands at $11.9B as of Sept. 30.

Operating earnings by business segment:

  • Insurance – underwriting: -$962M vs. -$784M in Q3 2021;
  • Insurance – investment income: $1.41B vs. $1.16B in Q3 2021;
  • Railroad – $1.44B vs. $1.54B in the year-ago quarter;
  • Utilities and energy — $1.59B vs. $1.50B in Q3 2021;
  • Other controlled businesses — $3.25B vs. $2.71B a year earlier:
  • Non-controlled businesses — $362M vs. $310M a year ago;
  • Other — $679M vs. $39M a year ago.

Developing… check back for updates.

SA contributor Jim Sloan explains why Berkshire (BRK.B) is an “ideal core holding.

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