Warren Buffett's Berkshire Hathaway: A Profitable Quarter with a Twist
In a surprising turn of events, Berkshire Hathaway, led by the legendary Warren Buffett, has reported a remarkable 34% jump in operating earnings. But here's the intriguing part: Buffett chose not to buy back any stock, instead letting the company's cash reserves soar to a staggering $381 billion.
On May 3, 2025, Warren Buffett and Greg Abel walked through the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, leaving investors with a lot to ponder. CNBC's David A. Grogen captured the moment, but the real story lies in the numbers.
Berkshire's operating profit, derived from its diverse portfolio of wholly-owned businesses spanning insurance to railroads, surged to $13.485 billion in Q3, a 34% year-over-year increase. This growth was largely driven by a remarkable 200%+ surge in insurance underwriting income, which reached $2.37 billion.
Despite a notable pullback in the stock, Buffett decided against repurchasing shares. The company confirmed no buybacks during the first nine months of 2025. Interestingly, Berkshire's Class A and B shares have risen by 5% each this year, outperforming the S&P 500's 16.3% gain.
With no buybacks, Berkshire's cash hoard reached a new record of $381.6 billion, surpassing the previous high of $347.7 billion set earlier this year. But here's where it gets controversial: Berkshire didn't invest in other stocks either, net selling equities in Q3 for a taxable gain of $10.4 billion.
The year-to-date performance of Berkshire Hathaway's Class A shares has been impressive, but the announcement of Buffett's impending departure as CEO at year-end has caused a double-digit tumble from all-time highs. This sell-off partly reflects the so-called Buffett premium, the extra price investors are willing to pay for the billionaire's unmatched record and exceptional capital allocation skills.
In a significant move last month, Berkshire announced a deal to acquire Occidental Petroleum's petrochemical unit, OxyChem, for $9.7 billion in cash. This marks Berkshire's largest deal since 2022, when it acquired insurer Alleghany for $11.6 billion.
Overall earnings, including gains from Berkshire's investments in other publicly traded companies, rose 17% to $30.8 billion year on year.
And this is the part most people miss: Greg Abel, Berkshire's vice chairman of non-insurance operations, is set to take over as CEO, with Buffett remaining as chairman. Abel will also start writing annual letters in 2026, a role traditionally held by Buffett. This transition raises questions about Berkshire's future direction and strategy.
What do you think? Will Berkshire's performance continue to thrive under Abel's leadership? Share your thoughts in the comments!
