Berkshire Hathaway buys back $9.6 billion of its own stock but its profits declined
Berkshire Hathaway accelerated its share repurchases to a record $9.6 billion during the third quarter, even as its overall profit fell by more than 28 percent. The drop in earnings stemmed from shifting investment values and declining performance at its Geico insurance unit, which increased its advertising spending while seeing deteriorating numbers. The massive buyback pace likely slowed recently as the company class A stock price surged past $878,000.
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- ✓ Berkshire Hathaway repurchased $9.6 billion worth of its own shares in the third quarter.
- ✓ Overall profit fell more than 28 per cent as the value of its investments changed.
- ✓ Warren Buffett gave up the chairman title in September after relinquishing the CEO job to Greg Abel in January.
- ✓ Geico numbers worsened as it invested more in ads.
What changed
Berkshire Hathaway more than doubled its quarterly share buybacks to $9.6 billion while reporting a drop in overall profits.
Live updates
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Berkshire Hathaway Buybacks Hit Record As Profits Fall
Berkshire Hathaway accelerated its share repurchases to a record $9.6 billion during the third quarter, even as its overall profit fell by more than 28 percent. The drop in earnings stemmed from shifting investment values and declining performance at its Geico insurance unit, which increased its advertising spending while seeing deteriorating numbers. The massive buyback pace likely slowed recently as the company class A stock price surged past $878,000.
Why it matters
The financial results shed light on the performance of a massive corporate conglomerate amid changing market conditions. The company experienced shifts in leadership recently, with Greg Abel taking over as CEO in January and Warren Buffett giving up his chairman title in September after announcing plans to retire. Observers track these share repurchases closely because they signal how management evaluates the intrinsic value of the stock.
What is confirmed
- Berkshire Hathaway repurchased $9.6 billion worth of its own shares in the third quarter.
- Overall profit fell more than 28 per cent as the value of its investments changed.
- Warren Buffett gave up the chairman title in September after relinquishing the CEO job to Greg Abel in January.
- Geico numbers worsened as it invested more in ads.
Still unconfirmed
- The buybacks likely came to a halt recently as Berkshire class A stock price surged past US$878,000.
What to watch next
- Whether the pace of share repurchases slowed further as the stock price surpassed US$878,000
- Upcoming quarterly disclosures regarding Geico advertising expenditures and investment performance
confidence 95%Sources used for this update (19)
- www.post-gazette.com — Pittsburgh Post-Gazette
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- Yahoo Finance — Warren Buffett’s Berkshire Just Spent a Record $9.6 Billion Buying Its Own Stock
- CNBC — Berkshire Hathaway more than doubles buybacks in third quarter as earnings decline
- WSJ — Berkshire Hathaway’s Quarterly Profit Falls After Investment Gains Shrink
- Reuters — Berkshire Hathaway accelerates stock buybacks, operating profit falls
- AP News — Berkshire Hathaway buys back $9.6 billion of its own stock but its profits declined
- Barron's — Berkshire Surprised With Record Buybacks, but Pace Slowed as the Stock Rose
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