Berkshire profit doubles as Buffett's insurers withstand storms

Breakfast Briefing Sorrell and Spanier

Breakfast Briefing Sorrell and Spanier

Billionaire Warren Buffett's conglomerate Berkshire Hathaway bought back $928 million of its stock as its third-quarter earnings jumped from $4.1 billion to $18.54 billion in one year, the company announced Saturday. Still, he's struggled to find ways to invest a swelling cash pile that has surpassed $100 billion each of the past five quarters.

Operating profit in the third quarter doubled to $6.88 billion from $3.44 billion a year earlier, and higher than the $6.11 billion expected by Wall Street, according to IBES data from Refinitiv. The financial services provider reported $4,190.00 earnings per share (EPS) for the quarter.

The company also got a boost from its massive insurance operations and the new United States tax code. In the same quarter a year ago, Reuters reported the Warren Buffet-owned company's insurance business had suffered due to three hurricanes in the USA and the quake in Mexico. Buffett has warned the moves could be "wild and capricious" and told investors to look at operating profit instead.

Berkshire's effective tax rate for the third quarter was 19.2 percent compared to 25.3 percent in the year-ago period following a reduction of the corporate tax rate that President Donald Trump signed into law in December.

Notably, Buffett's company bought back almost $1 billion in stock during the quarter - the first time that's happened in years - a possible sign that the world's most famous investor has been unable to find attractive investments to purchase.

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The company reported there were 733,152 Class A shares and 1.36 billion Class B shares, as of October 25, t It's market capitilizartuon is around $500 billion.

Berkshire's insurance unit, which includes Geico and several large reinsurance firms, reported a $441 million underwriting profit in the quarter. And the company's book value per Class A share was $228,712 on September 30, higher than $217,677 one quarter ago.

Among his favorite investments, Buffett has gobbled up shares of Apple Inc. As of September 30, Berkshire owned a $57.6 billion stake in Apple.

Smead said it makes sense for Buffett to buy back stock. The shares have traded below his average purchase price for much of the past two weeks and the Class A stock closed Friday's trading at $308,411.

"It reconfirms what we've known for a long time, which is that the stock has been under-priced".

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