With just two months left until Warren Buffett, 95, departs as CEO of the iconic conglomerate he made into one of the world’s largest investment companies over the past 60 years, earlier today Berkshire reported in its latest 10Q filings that its cash pile soared to a new all time high of $381.7 billion in the third quarter, an increase of $37.6 billion for the quarter, which translate to $420 million per day, and $17 million per hour.
At the same time operating earnings jumped 34% to $13.5 billion from $10.1 billion, as the firm’s insurance underwriting profit more than tripled in the third quarter boosted by lower insurance losses, offsetting declines in the Insurance-investment income and Berkshire’s Energy company.
The $13.49 billion quarterly operating profit, or $9,376 per Class A share, grew from $10.09 billion a year earlier. Currency fluctuations accounted for more than two-fifths of the increase.
While results benefited in part from an absence of major catastrophes such as hurricanes, Berkshire auto insurer Geico’s pretax underwriting profit fell 13% amid higher claims and a 40% increase in underwriting costs, which the firm said is due to “increased policy acquisition-related expenses” i.e., advertising, to acquire new policies in a period of soaring insurance costs. Additionally, insurance will likely face headwinds as falling interest rates reduce income from Berkshire’s cash holdings, which also occurred in the third quarter.
Meanwhile, Berkshire’s utilities business, which runs PacifiCorp, MidAmerican and NV Energy, posted a 9% decline in operating earnings, to $1.5 billion over the period, and reflected legal bills from wildfires, and higher costs from natural gas pipelines and Northern Powergrid in Britain. Berkshire is still evaluating how U.S. President Donald Trump’s One Big Beautiful Bill Act signed in July might affect the viability of its renewable energy projects.
One especially sore point was Pilot, which posted a $17 million loss in the third quarter. Berkshire said the decline is driven by lower wholesale fuel and retail margins, as well as higher expenses. “The Pilot business is not really doing very well,” Shanahan said. “I’m interested to see what the plan might be to turn that around.”
On the positive side, the BNSF railroad boosted operating earnings rose 6% to $1.4 billion, on lower fuel costs and “improved employee productivity” while revenue from the transportation of agricultural and energy products grew, driven in part by slightly higher grain exports.
Berkshire’s $30.8 billion of net income, or $21,413 per Class A share, rose from $26.25 billion a year earlier. Net results include gains and losses on stocks Berkshire is not selling. This adds volatility, and Buffett believes such results are useless in understanding his company.
Also of note: revenue for Berkshire, which is seen by many as a mini model of the broader US economy due to its extensive diversification, grew just 2%, slower than the overall U.S. economy’s growth rate.
Economic uncertainty and waning consumer confidence have been drags, Berkshire said, stalling sales growth at the Clayton Homes homebuilder and reducing revenue from Duracell batteries, Fruit of the Loom apparel and Squishmallows toymaker Jazwares.
“Berkshire, which is often considered a microcosm of the U.S. economy, isn’t even keeping up,” said Cathy Seifert, a CFRA Research analyst with a “hold” rating on Berkshire. “Investors will struggle to find a catalyst for this stock.”
Turning to the company’s investment activities, for the 12th straight quarter, Berkshire sold more stocks than it bought for its $283.2 billion equity portfolio…
… whose largest holdings are Apple, American Express and Bank of America.
In fact, at $13.7BN in sales in Q3, this was the most aggressive purging of risk since the same quarter in 2024.
“There isn’t much opportunity in Buffett’s eyes right now,” said Jim Shanahan, an analyst for Edward Jones.
For Berkshire’s bulls this may be vexing, since earlier this year, Buffett appeared to be back on the hunt for deals, with the acquisition of a $1.6 billion stake in UnitedHealth Group and a $9.7 billion deal to buy OxyChem last month. But the famed billionaire remained on the sidelines in the third quarter. Berkshire Hathaway offloaded $6.1 billion of shares during the period.
Also notable: after a burst of stock buybacks in the aftermath of the covid crash, Berkshire has not repurchased any of its own stock since Q2 2024…
…. which may explain why Berkshire’s stock price has significantly lagged the broader market, and is now trading where it was last August
“I think that sends a very powerful message to shareholders,” said Cathy Seifert, an analyst at CFRA Research. “If they’re not buying back their shares, why should you?”
And since Berkshire isn’t buying either others shares, or its own, it had to park all this record cash somewhere; and once again it did so by buying a record $183 billion (net) in treasuries in the quarter, bringing total purchases during the past 12 months to a record $540 billion.
Berkshire’s massive holdings of T-Bills is also why the firm’s net investment income declined 13% to $3.2 billion amid lower short-term interest rates.
As previously reported, Buffett, 95, is set to end his six-decade tenure as chief executive at the end of the year. Vice Chairman Greg Abel, 63, will succeed the legendary investor, though Buffett will remain chairman. Abel is known as a more hands-on manager than Buffett.
It is unclear what he will do with Berkshire’s record cash, with options including paying the $1.03 trillion conglomerate’s first dividend since 1967. Berkshire is planning to use $9.7 billion of cash to buy Occidental Petroleum’s chemicals business, a transaction announced on October 2. James Shanahan, an Edward Jones analyst who upgraded his Berkshire rating to “buy” in September, said the company’s resistance to spending more cash during this year’s market rally has been disappointing.
“If you feel like stocks are expensive, including your own shares, you’re eventually going to be right, but you can be wrong for a long time, and that’s what happened here,” he said.
And indeed, it’s not just Berkshire that has not been buying back its own stock: investors have voted their apprehension about Berkshire’s outlook and pending management change by selling its stock. Since Buffett announced on May 3 he would step down, Berkshire’s stock price has fallen 12%, and trailed the S&P by 32%. For all of 2025, Berkshire is 11% points behind the index.
“Impatient investors feel an urgent need for Berkshire to deploy its cash, and have been casting their nets elsewhere,” said Tom Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, which invests $10 billion.
Russo has owned Berkshire stock since 1982 and said Berkshire remains “extremely well-positioned” for the long term. “Berkshire isn’t going to deploy capital that won’t increase intrinsic value on a per share basis,” he said. “Knowing that guides Berkshire means investors won’t have to second-guess it.”
The conglomerate owns close to 200 businesses that also include chemical and industrial companies, and familiar consumer brands such as Dairy Queen and See’s Candies. As noted yesterday, many US businesses which rely on the strength of the consumer has been hammered in recent weeks because while the AI trade continue to soar, the US consumer has hit a brick wall and even Goldman Sachs is warning that the deterioration in K-Shaped economy is starting to spread from the lower income class to America’s otherwise unstoppable middle class.
Berkshire has not made a huge acquisition since paying $32.1 billion for aerospace parts maker Precision Castparts in 2016, a deal which ended up being a disaster.
“Abel has a tremendous opportunity,” Shanahan said. “He has a lot of available cash and by all accounts he is an excellent operator, so he may want to deploy capital in Berkshire’s operating businesses to improve their performance.”
Still, despite the earnings gains and massive cash pile, the firm’s tepid revenue growth in the period is not going to help investor sentiment, according to CFRA’s Seifert.
“I’m struggling to find a catalyst” for an increase in the stock price, she said.
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