On Saturday morning Eastern Time, Berkshire Hathaway, owned by stock investor Warren Buffett, announced its third-quarter results. The company’s third-quarter operating profit increased by more than 40% year-on-year.The financial report also showed that the company has record cash reserves and has slowed down itsrepurchaseThe velocity of own stock.
According to the third quarter financial report, Berkshire achieved revenue of US$93.21 billion in Q3 2023, which was expected by the market to be US$89.182 billion, an increase of 21.2% from US$76.9 billion in the same period last year;net profitThe loss was US$12.767 billion, compared with a loss of US$2.698 billion in the same period last year. This was the company’s first quarterly loss this year. However, the company still achieved a profit of US$58.649 billion in the first three quarters, which was much better than the loss of US$40.8 billion in the same period last year.
Operating profits, which reflect the performance of Berkshire’s railway, energy and other entity businesses, reached US$10.761 billion in the third quarter, a year-on-year increase of 40.6%.
Operating profit is a financial indicator that Buffett attaches great importance to, far more than net profit, because net profit is often affected by the ups and downs of investment income.According to the requirements of US accounting standards, price fluctuations of stocks invested by listed companies will be reflected in the company’sperformancereported, even if it is just unrealized paper gains or paper losses.
As in past financial reports, investment income is still the most important factor affecting the company’s net profit indicators.third quaterCompany investmentRevenue losses amounted to US$24.1 billion, but a cumulative profit of US$23.5 billion was achieved in the first three quarters.
In the third quarter, Berkshire lost $8,824 per Class A common share and $5.88 per Class B common share.
After Berkshire’s total assets exceeded US$1 trillion for the first time in the second quarter, the company’s total assets dropped to US$1,019.933 billion in the third quarter, from US$1,041.573 billion at the end of June.
Buybacks slow, record cash on hand
As Berkshire’s stock price reached a record high in the third quarter, the company’s pace of repurchasing shares slowed down. It only spent about US$1.1 billion to repurchase shares in the third quarter, and the cumulative amount of repurchases this year has reached US$7 billion.
Berkshire’s Class A shares have risen nearly 14% this year. After hitting a record high of $566,570 on September 19, the stock price has fallen back recently, with the cumulative retracement reaching about 6%.
In addition, Berkshire’s cash reserves increased to a record US$157.24 billion at the end of September and US$147.377 billion at the end of June. The previous record high was US$149.2 billion in the third quarter of 2021. At the end of September, Berkshire’sInsuranceThe company’s float is approximately US$167 billion, an increase of US$3 billion from the end of last year.
Because of the United Statesinterest rateRemaining high, Berkshire has invested more than 100 billion US dollars in short-term government bonds. At the end of September, the figure was US$126.4 billion, compared with US$92.77 billion a year ago.
Heavy holdings remain unchanged
Berkshire’s top five holdings remained unchanged this quarter.
According to the Q3 financial report disclosure,appleIt is still Berkshire’s largest holding, with a market value of $156.8 billion; followed byBank of America($28.3 billion),American Express($22.6 billion),Coca Cola($22.4 billion),Chevron($18.6 billion). Positions in these five stocks account for 78% of its portfolio, unchanged from the previous quarter.
In addition, there are two companies included in the investment portfolio, which account for a relatively high proportion of the invested company’s shares, namely a food companyKraft Heinzandoccidental petroleum.
Currently, BerkshireKraft Heinzandoccidental petroleumThe shares are worth US$10.948 billion and US$14.541 billion respectively based on market price.
(Source of article: Financial Associated Press)
Source of article: Financial Associated Press
Original title: Warren Buffett’s Berkshire Hathaway’s Q3 operating profit jumps 40%, cash on hand hits record high
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