Berkshire Hathaway, under the helm of Warren Buffett, has released its Q3 earnings report: operating profit increased by 40% YoY, while stock market losses amounted to $24.1 billion. The company now holds a record high of $157.2 billion in cash reserves.

Berkshire Hathaway's earnings report has been released, showing a significant 40% increase in operating profit in the third quarter. At the same time, the company holds a record amount of cash, indicating that Buffett seems to have not found any trading opportunities.

On the evening of November 4th, Saturday, the "Oracle of Omaha" Warren Buffett's Berkshire Hathaway released its financial report for the third quarter of 2023.

The report shows that Berkshire Hathaway achieved revenue of $93.21 billion in the third quarter, surpassing market expectations of $89.182 billion and last year's figure of $76.93 billion.

The company reported a net loss of $12.77 billion in the third quarter, compared to a net profit of $35.91 billion in the previous quarter. This is the first quarterly loss for the company this year.

Operating profit in the third quarter increased by 40.6% YoY to $10.7 billion

The most important profit indicator for Buffett, operating profit, reached $10.7 billion, a 40.6% increase compared to $7.65 billion in the same period last year. This far exceeded market expectations of $8.95 billion and increased by 7.1% QoQ.

Among them, the operating profit from insurance underwriting in the third quarter was $2.42 billion, a 94% increase QoQ; the operating profit from insurance investments was $2.47 billion, a 4.3% increase QoQ; the operating profit from other holding businesses was $3.34 billion, a 4.6% decrease QoQ. The operating profit from non-holding businesses was $226 million, a 58% decrease QoQ.

Although Berkshire Hathaway's operating profit has increased significantly, the group does acknowledge the negative economic impact of the pandemic, as well as geopolitical risks and inflationary pressures. Berkshire stated in the earnings report:

To varying degrees, our operating businesses have been affected by actions taken by governments and the private sector to mitigate the adverse economic effects of the COVID-19 pandemic, as well as the impact of geopolitical conflicts, supply chain disruptions, and government actions to slow inflation, the long-term economic effects of these events cannot be reasonably estimated at this time.

Stock investments in the third quarter resulted in a loss of $24.1 billion, with Apple being the main contributor

However, Berkshire Hathaway's equity securities holdings incurred a significant investment loss of $24.1 billion in the third quarter, but the total profit for the first three quarters was $23.5 billion.

This was mainly due to the decline in the stock price of Apple, which fell by 11.7% in the quarter but rebounded by more than 3% thereafter.

Net loss of $12.77 billion in the third quarter, compared to a loss of $2.798 billion in the same period last year, and a net profit of $58.65 billion for the first three quarters

After taking into account investment and derivative gains and losses, the net loss attributable to Berkshire Hathaway shareholders in the third quarter was $12.77 billion, while the net profit for the first three quarters was $58.65 billion. In the same period last year, the company incurred a loss of $2.798 billion, and a net loss of $40.84 billion for the first three quarters. Berkshire Hathaway reiterated that the amount of investment profit or loss in any specific quarter is usually meaningless, and the resulting earnings per share data may greatly mislead investors who have little knowledge or no knowledge of accounting rules. Buffett advocates focusing on the operating performance of Berkshire Hathaway's specific controlled businesses, including insurance, railways, utilities, energy, and retail.

In terms of stock buybacks and cash reserves, as Berkshire Hathaway's stock price reached a historic high this quarter, buyback activities continued to slow down. In the third quarter, approximately $1.1 billion was used to repurchase Berkshire Hathaway stock, a decrease of 21% compared to the second quarter's $1.4 billion, bringing the total stock buybacks for the first three quarters of this year to approximately $7 billion.

As of September 30th, Berkshire Hathaway's total cash, cash equivalents, and short-term US securities amounted to $157.24 billion, reaching a historic high and increasing by 6.67% or $9.84 billion compared to the end of the first quarter's $130.6 billion. Berkshire Hathaway keeps most of its cash in US bonds with a yield of over 5%.

As of September 30th, approximately 78% of the fair value of equity investments was concentrated in five companies, and the top five stocks remained unchanged: Apple, Bank of America, American Express, Coca-Cola, and Chevron. Among them, the market value of Berkshire Hathaway's holdings in American Express is $22.6 billion, Apple is $156.8 billion, Bank of America is $28.3 billion, Coca-Cola is $22.4 billion, and Chevron is $18.6 billion. In addition, there are two companies included in the investment portfolio, with a relatively high percentage of ownership in the invested companies, namely food company Kraft Heinz and Western Petroleum.

Berkshire Hathaway's Class A shares rose 0.7% to $533,815 on Friday, up nearly 14% year-to-date, lagging behind the S&P 500 index by about one percentage point. After reaching its all-time high on September 19th, the stock price has fallen by about 6%.

Continuously updated.