Berkshire Hathaway Inc.’s cash pile soared to $325.2 billion in the third quarter, a record for the multinational conglomerate, after chairman Warren Buffett continued to trim some of his most significant equity stakes and refrain from major acquisitions. Berkshire Hathaway once again trimmed its holdings in Tim Cook-led technology giant Apple Inc., the Omaha, Nebraska-based conglomerate said in a statement on November 2, Saturday.
The conglomerate's stake in the iPhone maker was valued at $69.9 billion at the end of the quarter, down from $84.2 billion in the second quarter, indicating that the company cut its stake by about 25 per cent. Berkshire Hathaway first disclosed its Apple stake in 2016 and spent $31.1 billion on the 908 million Apple shares it held through the end of 2021. Berkshire sold over 600 million Apple shares in 2024, though it remains its largest stock holding.
Berkshire sold $36.1 billion of stock overall, including several billion dollars of Bank of America (BofA) shares, and bought just $1.5 billion, making the quarter the eighth straight quarter in which Berkshire was a net seller of stocks. Berkshire did not repurchase any of its stock, the first time since the second quarter of 2018, suggesting that Buffett does not even view shares of his $975 billion conglomerate as a bargain.
Buffett said in May that Apple was an “even better” business than two others in which Berkshire owns shares: American Express Co. and Coca-Cola Co. Apple would likely remain its top holding, indicating that tax issues had motivated the sale, “but I don’t mind at all, under current conditions, building the cash position,” he said. Berkshire was a net seller of shares. The company reported $34.6 billion in net share sales in the third quarter.
The company has struggled to find ways to deploy its cash pile, as Warren Buffett has found market prices too high to find attractive deals. At its annual shareholder meeting in May 2024, Buffett said Berkshire was not in a rush to spend “unless we think we’re doing something that has very little risk and can make us a lot of money.” Berkshire's market value is at $974.3 billion and eclipsed $1 trillion for the first time on August 28.
Berkshire’s operating earnings fell six per cent from a year earlier to $10.09 billion, largely due to insurance underwriting losses, including Hurricane Helene, and currency losses from a strengthening US dollar. Buffett has said operating results better reflect Berkshire's performance.
Earnings from underwriting at the conglomerate's collection of insurance businesses slumped 69 per cent, to $750 million, versus $2.4 billion a year earlier, driven by higher losses at Berkshire Hathaway Primary Group.
Net income totalled $26.25 billion, reflecting unrealized gains on Berkshire's stock investments, including Apple. In May, Buffett said he expected Apple to remain Berkshire's largest stock investment, but selling made sense because the 21 per cent federal tax rate on the gains would likely grow. Berkshire also projected $1.3 billion to $1.5 billion of pre-tax losses in the fourth quarter from Hurricane Milton, which slammed into Florida in October.
Buffett, 94, has led Berkshire since 1965 and is expected to transfer leadership to Vice Chairman Greg Abel, 62. The conglomerate's businesses include Berkshire Hathaway Energy, many industrial and manufacturing companies, a big real estate brokerage, and retail businesses such as Dairy Queen and Fruit of the Loom. Berkshire's Class A shares are up 25 per cent this year, while the Standard & Poor's 500 has risen 20 per cent.
With inputs from Bloomberg and Reuters
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