Warren Buffett's Berkshire Hathaway swings back into action, spending a net $4.8 billion on stocks and a record $9 billion on buybacks in the 3rd quarter

REUTERS/Rick Wilking

  • Warren Buffett’s Berkshire Hathaway reported third-quarter earnings on Saturday.
  • The billionaire investor’s company bought back a record $9 billion of its shares, and spent a net $4.8 billion on stocks after selling a net $12.8 billion in the second quarter.
  • Berkshire’s increased spending meant its cash pile shrunk by about $1 billion to below $146 billion.
  • Buffett and his team announced more than $19 billion of investments last quarter, as they struck deals with Dominion Energy and Scripps and also bought shares in Bank of America, Snowflake, and five Japanese trading companies.
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Warren Buffett’s Berkshire Hathaway ramped up share buybacks and bought more stocks than it sold in the third quarter, signaling the famed investor’s conglomerate is opening its wallet and finding bargains again after taking cover during the pandemic.

Buffett’s company — which owns scores of businesses including Geico, See’s Candies, and the Burlington Northern railroad, and holds billion-dollar stakes in public companies such as Apple, Bank of America, and Coca-Cola — repurchased $9 billion of its own stock last quarter, smashing its previous record of $5.1 billion set in the second quarter.

Berkshire also reported $4.8 billion of net stock purchases, after selling $12.8 billion of stock on a net basis in the second quarter. The increased spending meant its cash pile shrunk by about $1 billion to a little under $146 billion, leaving plenty of ammunition for future deals.

Read more: Warren Buffett’s Berkshire Hathaway swung from extreme caution to a flurry of deals in 6 months. We asked a bunch of experts to analyze its shifting strategy

The pandemic continued to weigh on Berkshire’s financials last quarter. It stomached a 3% drop in revenues as sales fell in both the “insurance and other” and “railroad, utilities, and energy” divisions.

For example, Precision Castparts’ revenue tumbled more than 40% due to reduced demand for airplane parts, slashing the manufacturer’s pre-tax earnings by 80%.

However, the soaring value of Berkshire’s stakes in Apple — its largest holding — and other companies fueled about $32 billion in investment gains, driving its net earnings up 83% to $30.4 billion.

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Berkshire’s earnings underline its shift from slashing financial holdings and dumping airline stocks in the second quarter, to announcing more than $19 billion worth of investments last quarter.

Specifically, Buffett and his team struck a $10 billion deal to buy most of Dominion Energy’s natural-gas assets, plowed $2.1 billion into Bank of America stock, disclosed a $6 billion wager on five Japanese trading companies, bought $735 million of Snowflake stock when the cloud-data platform went public, and agreed to hand Scripps $600 million to fund an acquisition in return for preferred stock and a warrant.

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