Warren Buffett's Berkshire Hathaway spent a net $3.7 billion on stocks last quarter - and plowed another $1 billion into buybacks

• Warren Buffett's Berkshire Hathaway reported higher third-quarter revenues and operating profits.
• Buffett's company spent a net $3.7 billion on stocks, and repurchased $1 billion of shares.

Warren Buffett's Berkshire Hathaway reported a strong performance from its operating businesses, and disclosed it was a net buyer of stocks and an ongoing repurchaser of its shares, in its third-quarter earnings on Saturday.

The famed investor's company posted a 9% year-on-year increase in revenues to $76.9 billion, which drove pre-tax earnings from its operating businesses up 9% to $7.9 billion. However, a $13.5 billion decline in the value of Berkshire's investment portfolio meant it swung to a $2.6 billion net loss on a headline basis.

Revenues rose across all of Berkshire's main divisions, but Geico's underwriting losses widened and profits shrunk at the BNSF Railway and Berkshire Hathaway Energy. Weakness in those areas was offset by higher income from manufacturing, service and retailing, and the McLane distribution business.

Buffett's conglomerate spent a net $3.7 billion on equities last quarter, as it bought $9 billion of shares and sold $5.3 billion worth. Its net outlay was similar in the second quarter, but well below the record $41 billion it deployed in the first quarter of this year.

Berkshire spent $1 billion on buybacks, which was in line with its second-quarter spending, but well below the $3 billion of stock it repurchased in the first quarter. Berkshire stock has dropped 4% this year, but Buffett appears to be finding more compelling assets to buy.

The modest spending meant Berkshire's cash pile swelled by about $4 billion to $109 billion. It shrunk by 28% to $106 billion in the first quarter as the conglomerate invested heavily in stocks.

Buffett and his colleagues struggled to find bargains during the first two years of the pandemic, as stocks surged to record highs, private equity firms and special-purpose acquisition companies (SPACs) bid up the price of acquisitions, and Berkshire's rising stock price made its shares less appealing to repurchase.

However, Berkshire has capitalized on the stock-market downturn this year. It has plowed about $10 billion into Occidental Petroleum stock, amassed a Chevron stake valued at $30 billion, and recently completed its $12 billion acquisition of a fellow conglomerate, Alleghany.

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