Billionaire businessman Warren Buffett’s investment group, Berkshire Hathaway, has reached a new record in its cash accumulation. In the third quarter, the conglomerate’s liquidity position reached 381.7 billion dollars (329,063.57 million euros at the current exchange rate), according to the results presented this Saturday, the last before, after six decades at the helm, and giving way to the current vice president of the company,.
The conglomerate’s operating profits increased 34%, to $13.5 billion (€11,638.35 million), driven by the company’s insurance underwriting profits that tripled in a period marked by unusually low catastrophic activity, according to documents made public and reported by Bloomberg.
It seemed that Buffett was once again interested in closing deals: in the summer the acquisition of a stake worth 1,600 million dollars (1,379.36 million euros) was announced, and last month he closed the purchase of (8,362.37 million euros). However, the famous investor, 95 years old and known as the Oracle of Omaha, not only stayed on the sidelines in the third quarter, but his investment firm got rid of $6.1 billion (€5,258.81 million) in shares during that period.
In fact, despite Berkshire Hathaway’s growing cash reserve, its net investment income fell 13% to $3.2 billion (€2,758.72 million) due to declining short-term interest rates.
The company’s primary insurance and reinsurance divisions posted pre-tax profits for the quarter, after posting losses in the same period a year earlier. However, pre-tax profits at Geico, the group’s auto insurer, fell 13% due to a slight increase in claims. As explained by the company, this is due to the “increase in expenses related to the acquisition of policies.”
Berkshire’s earnings are the subject of close attention because the conglomerate’s suite of businesses — which range from insurance to railroads, energy and manufacturing — offers a snapshot of the health of the U.S. economy. The operating profits of its BNSF railway unit increased 5%, to 1.4 billion dollars (1,206.94 million euros), thanks to growth in revenue from the transportation of agricultural and energy products, driven in part by a slight increase in grain exports.
At the same time, Berkshire’s utilities business, which manages PacifiCorp, MidAmerican and NV Energy, recorded a 9% decline in operating profits to $1.5 billion (€1,293.15 million) during the period. However, a delicate point is Pilot, which recorded losses of 17 million dollars (14.65 million euros) in the third quarter. In the words of Berkshire, this figure is due to the decrease in wholesale and retail fuel margins, as well as the increase in expenses.
Despite solid earnings, Berkshire Hathaway has gone five consecutive quarters without buying back its own shares, which have fallen nearly 12% since Buffett announced his upcoming withdrawal
