Berkshire Hathaway Profit Drops 28% to $22.1 Billion Amid $9.6 Billion Share Buyback

Berkshire Hathaway reported a third-quarter profit of $22.1 billion on Saturday, marking a decline of more than 28% from the $30.8 billion recorded in the same period last year. The conglomerate repurchased $9.6 billion in its own stock during the quarter. That buying spree appears to have paused as the company's Class A shares surged past $878,000.

The stock price has now climbed above its level before Warren Buffett announced his retirement plans at the annual meeting in May 2025. Buffett relinquished the CEO role to Greg Abel in January and stepped down as chairman in September.

Operating earnings, which exclude volatile investment gains and losses, fell nearly 6% to $12.7 billion. This figure, equivalent to $8,907 per Class A share, compares to $13.485 billion, or $9,376.15 per share, a year ago. Four analysts surveyed by FactSet Research had projected operating earnings of $8,821.84 per Class A share.

The decline in performance was driven largely by the insurance division. Underwriting profit across all of Berkshire's insurers dropped to $1.35 billion from $2.37 billion in the prior year. Geico, the largest contributor to that total, generated $982 million this quarter, down from $1.77 billion last year.

Cathy Seifert, a CFRA Research analyst, noted that Geico faces pressure as insurance premiums decline while the average cost of claims rises. She stated that the insurer is in a tough spot with these opposing market forces.

Chris Ballard, managing director at Check Capital and a Berkshire investor, told ABC News that the numbers were not a disappointment. He explained that the company is reinvesting in its iconic spokeslizard to attract more customers. Ballard said getting aggressive at writing new policies typically pressures an auto insurer's bottom line. "It should be looking better. Progressive is doing better, but they were doing so well for so long. They had cut their advertising for quite a while there," Ballard said. "So we've been kind of expecting this on our end."

Berkshire's cash reserves grew in the third quarter, reaching $377.4 billion from $365.5 billion at the end of June. Seifert observed that the noninsurance businesses Abel has managed, including Precision Castparts, BNSF railroad, and various utilities, are performing better than the insurance unit. She added that these operations seem to benefit from Abel's specific strengths. "I think we’re seeing the businesses that play to Greg’s strengths do well. But the question is what about the rest of the franchise," Seifert said.