(Bloomberg) -- Berkshire Hathaway Inc. reported operating profit that jumped 14% to a record high as Warren Buffett’s conglomerate saw gains across its sprawling operations.
Investment gains at the company’s insurers and an increase in earnings from its railroad helped drive operating profit to $7.86 billion in the third quarter, up from $6.88 billion a year earlier.
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Berkshire reported a cash pile of $128 billion, pushing past the record set in the second quarter. Buffett’s mountain of cash has grown as he’s struggled to find large acquisitions to juice Berkshire’s returns.Buffett snapped up about $700 million of Berkshire Hathaway stock in the third quarter. He has long preferred to use some of his cash pile to buy companies or common stocks of other businesses. But as high valuations stymied acquisitions, buybacks have been more common.Berkshire’s stock is on track for its worst underperformance since 2009. The company’s Class A shares gained 5.7% this year through Friday’s close, short of the 22% climb in the S&P 500 Index during that time.
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Net earnings slipped 11% to $16.5 billion. Under new accounting rules, Berkshire has to report swings in its investment portfolio in its net income figures. The unrealized gains during the third quarter were about $8 billion compared to a gain of $10.2 billion in the same period a year earlier.Berkshire also reaped $513 million in realized gains on the sales of investments during the third quarter. That was down from $995 million in realized gains the company reported a year earlier.Berkshire’s press release is here.
To contact the reporter on this story: Katherine Chiglinsky in New York at kchiglinsky@bloomberg.net
To contact the editor responsible for this story: Michael J. Moore at mmoore55@bloomberg.net
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