Berkshire Hathaway accelerated its share repurchases to $9.6 billion in the third quarter, more than double the $4.5 billion bought back in the second quarter, even as operating and overall earnings declined, the company said Saturday.
The Greg Abel-led conglomerate's total buybacks for 2026 now stand at about $14.4 billion. The increase in repurchases came as operating earnings from Berkshire's wholly-owned businesses fell 5.8% year over year to $12.705 billion, from $13.485 billion. Insurance underwriting tumbled 43% to $1.352 billion, while insurance investment income declined 14% to $2.734 billion. Berkshire's railroad, energy and manufacturing businesses all reported earnings growth compared to the same period last year.
Overall earnings, including Berkshire's stock portfolio, dropped 28% in the third quarter to $22.112 billion from $30.796 billion a year prior. Investment gains fell nearly 50% to $9.407 billion.
Despite the earnings pullback, Berkshire stock has outperformed recently amid a rotation out of technology stocks. Class A shares are up more than 12% over the past month, while the S&P 500 has fallen 5.5% in that period. Year to date, Berkshire has gained 13% compared to the broad market index's 7.8% rise.
Berkshire's five largest equity holdings remained unchanged in the quarter: Alphabet, American Express, Apple, Bank of America and Coca-Cola. The company's cash hoard grew 3% in the third quarter $377.435 billion from $365.514 billion in the second quarter. However, excluding rail and utility cash along with T-bill payables, cash holdings totaled $352.3 billion, down 1.9% quarter over quarter.
Analysis
Why This Matters
- The doubling of buybacks signals that Berkshire's leadership sees its stock as undervalued even as earnings decline, a vote of confidence from the company.
- A sharp 43% drop in insurance underwriting profits raises questions about underwriting discipline amid a competitive market.
- Berkshire's outperformance amid a tech selloff highlights its role as a defensive holding during market rotations.
Background
Berkshire Hathaway is a conglomerate with major holdings in insurance, railroad, energy, and manufacturing, along with a large public stock portfolio. Under CEO Greg Abel, the company continued its pattern of using excess cash for share repurchases. Buybacks had slowed to $4.5 billion in the second quarter before the third quarter surge. The company's cash position, including T-bills, remains massive at over $350 billion.
Key Perspectives
- Berkshire Hathaway management: The decision to more than double buybacks suggests they believe Berkshire stock is an attractive use of capital despite lower earnings.
- Investors/the market: The stock's 12% monthly gain indicates approval of the buyback strategy and a flight to perceived safety amid tech stock declines.
What to Watch
- Whether Berkshire continues elevated buybacks into the fourth quarter or lets its cash hoard rebuild.
- Insurance underwriting results next quarter: if the 43% drop persists, it could pressure overall operating earnings.
- The performance of Berkshire's top equity holdings, particularly Bank of America and Apple, which may affect future investment gains.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedBerkshire bought back $9.6 billion of shares in the third quarter, more than double the $4.5 billion bought back in the second quarter.US Top News and Analysis: “The Greg Abel-led conglomerate bought back $9.6 billion worth of Berkshire stock. That's more than double the $4.5 billion repurchased in the second quarter”
- SupportedOperating earnings fell 5.8% year over year to $12.705 billion from $13.485 billion.US Top News and Analysis: “Berkshire operating profits totaled $12.705 billion, down 5.8% from $13.485 billion in the year-earlier period.”
- SupportedInsurance underwriting fell 43% year over year to $1.352 billion.US Top News and Analysis: “Insurance underwriting tumbled 43% year on year to $1.352 billion”
- SupportedBerkshire Hathaway said Saturday that it accelerated its share repurchases during the third quarter.US Top News and Analysis: “Berkshire Hathaway said Saturday it accelerated its share repurchases during the third quarter”
- SupportedBerkshire's buybacks for 2026 totaled about $14.4 billion.US Top News and Analysis: “brings the company's total buybacks for 2026 to about $14.4 billion.”
- SupportedInsurance investment income declined 14% to $2.734 billion.US Top News and Analysis: “insurance investment income declined 14% to $2.734 billion.”
- SupportedBerkshire's railroad, energy and manufacturing businesses all had year-over-year earnings growth.US Top News and Analysis: “Berkshire's railroad, energy and manufacturing businesses all saw earnings grow year over year.”
- SupportedOverall earnings fell 28% in the third quarter to $22.112 billion from $30.796 billion a year earlier.US Top News and Analysis: “The company's overall earnings, which include Berkshire's sprawling stock market portfolio, also dropped 28% in the third quarter to $22.112 billion from $30.796 billion a year prior.”
- SupportedInvestment gains fell nearly 50% to $9.407 billion.US Top News and Analysis: “Investment gains for the company fell nearly 50% to $9.407 billion.”
- SupportedOver the past month, Berkshire Class A shares rose more than 12% while the S&P 500 fell 5.5%.US Top News and Analysis: “Class A shares are up more than 12% over the past month, while the S&P 500 has dropped 5.5% in that time.”
- SupportedBerkshire's cash hoard grew 3% in the third quarter, from $365.514 billion to $377.435 billion.US Top News and Analysis: “Berkshire's cash hoard also grew 3% in the third quarter $377.435 billion from $365.514 billion in the second quarter.”
- SupportedExcluding rail and utility cash along with T-bill payables, Berkshire's cash holdings were $352.3 billion, down 1.9% quarter over quarter.US Top News and Analysis: “excluding rail and utility cash along with T-bill payables, the conglomerate's cash holdings totaled $352.3 billion, down 1.9% quarter over quarter.”
