Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A) bought back ~$9B of stock during Q3, bringing the nine-month total to ~$16B.
That’s up from the $5.1B of stock the conglomerate bought in Q2.
Q3 operating earnings of $5.48B vs. $5.51B in Q2 and $8.07B in the year-ago quarter.
The only major business segment to see a year over year increase in operating earnings was railroad, utilities and energy, while insurance underwriting posted a loss vs. a year-ago profit.
Losses and costs associated with COVID-19 negatively hurt its commercial insurance and reinsurance underwriting results; furthermore, future judicial rulings and regulatory and legislative actions relating to insurance coverage and claims may affect future results.
“Our underwriting results for the remainder of 2020 and the first quarter of 2021 for certain business may be adversely affected from lower premiums attributable to credits granted to policyholders and where premiums are a function of the insured’s payroll,” the company said in its 10-Q.
Operating earnings by segment:
- Insurance underwriting: loss of $213M vs. earnings of $440M a year ago.
- Insurance – investment income: $1.02B vs. $1.48B a year ago.
- Railroad, utilities and energy: $2.74B vs. $2.64B a year ago.
- Other businesses: $2.35B vs. $2.46B a year ago;
- Other: loss of $412M vs. earnings of $1.05B a year ago.
Q3 net earnings of $30.1B vs. $26.3B in Q2 and $16.5B a year ago; investment gains fell to $24.8B vs. $31.0B in Q2 and rose from $8.7B a year ago.
Insurance float was ~$135B at Sept. 30, 2020, vs. ~$131B at June 30, 2020.
The company had ~$145.7B of cash, equivalents and short-term investments as of Sept. 30, 2020, just under the $146.6B it had at June 30.
About 70% of Berkshire’s investments in equities securities’ aggregate fair value at Sept. 30 was concentrated in four companies with Apple (NASDAQ:AAPL) by far the biggest, at $111.7B. The others are Bank of America (NYSE:BAC) at $24.9B, Coca-Cola (NYSE:KO) at $19.7B, and American Express (NYSE:AXP) at $15.2B.
At Dec. 31, 2019, its investments in those four companies represented 60% of aggregate fair value — $73.7B for AAPL, $33.4B for BAC, $22.1B for KO and $18.9B for AXP.
Digging further down into Berkshire’s 10-Q filing and the company’s unit results, its railroad, BNSF saw earnings before income taxes slip to $1.78B vs. $1.94B in Q3 2019, primarily due to lower volumes because of the pandemic.
Berkshire Hathaway Energy’s earnings before income taxes increased to $1.12B from $1.06B a year earlier.
Manufacturing earnings before income taxes fell to $2.26B from $2.48B, and service and retailing earnings before income tax increased to $779M from $639M.
McLane Company saw earnings before income taxes nearly double Y/Y to $96M from $50M.
Works Cited:
https://seekingalpha.com/news/3633328-berkshire-hathaway-buys-back-9b-in-stock-in-q3