Berkshire Hathaway Reports Q3 Earnings, Record $9.3B Stock Buyback

Warren Buffett-led Berkshire Hathaway Inc. (NYSE: BRK-A) has released its Q3 earnings report.

What Happened: Third-quarter operating profits fell at Berkshire Hathaway from a year ago, amid record repurchases of stock.

Berkshire posted a 32% fall from $8.07 billion to $5.48 billion a year ago, while net income rose to $30.1 billion from $16.5 billion in the third quarter of last year, the company reported this morning.

The company reported that its stock repurchases rose to about $16 billion in the first nine months of the year, with $9.3 billion of that coming in the third quarter.

Earlier this year, in his annual letter Buffett explained the decision to repurchase stock, as reported by CNBC.

“Our thinking, boiled down: Berkshire will buy back its stock only if a) Charlie [Munger] and I believe that it is selling for less than it is worth and b) the company, upon completing the repurchase, is left with ample cash.” 

He added, “over time, we want Berkshire’s share count to go down. If the price-to-value discount (as we estimate it) widens, we will likely become more aggressive in purchasing shares. We will not, however, prop the stock at any level.”

Why It Matters: The company has been negatively affected by the ongoing pandemic this year.

According to Reuters, even though some of Berkshire's businesses have been able to get back on their feet, companies like Precision Castparts Corp. are still struggling and expecting to undergo thousands of job cuts.

Price Action: Berkshire Hathaway shares closed Friday session 0.65% higher, at $208.85.

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