Finance

Berkshire Hathaway BRK earnings Q3 2024

Published

4 months ago

November 2, 2024

Business Finance News

Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 4, 2024.

CNBC

Warren Buffett sold another big chuck of his Apple stake, downsizing Berkshire Hathaway‘s biggest equity holding for four quarters in a row.

The Omaha-based conglomerate held $69.9 billion worth of Apple shares at the end of September, according to its third-quarter earnings report released Saturday morning. That implied Buffett offloaded approximately a quarter of his stake with about 300 million shares remaining in the holding. In total, the stake is down 67.2% from the end of the third quarter last year.

The Oracle of Omaha started trimming his stake in the iPhone maker in the fourth quarter of 2023 and ramped up selling in the second quarter when he surprisingly dumped nearly half of the bet.

Apple, YTD

It’s unclear what exactly motivated the continuous selling in the stock Berkshire first bought more than eight years ago. Analysts and shareholders had speculated it was due to high valuations as well as portfolio management to reduce concentration. Berkshire’s Apple holding was once so big that it took up half of its equity portfolio.

In May at the Berkshire annual meeting, Buffett hinted that the selling was for tax reasons as he speculated that the tax on capital gains could be raised in the future by a U.S. government wanting to plug a climbing fiscal deficit. However, the magnitude of the sales made many believe it could be more than just a tax-saving move.

Amid the big selling spree, Berkshire’s cash hoard reached $325.2 billion in the third quarter, an all-time high for the conglomerate.

Class A shares of Berkshire have gained 25% this year, outpacing the S&P 500’s 20.1% year-to-date return. The conglomerate crossed a $1 trillion market cap milestone in the third quarter when it hit an all-time high.

Apple shares are up 16% on the year, trailing the S&P 500’s 20% gain.

This is breaking news. Please check back for updates.

Finance

BRK, HOOD, NKE, PLTR and more

Published

55 minutes ago

February 24, 2025

Business Finance News

Finance

Berkshire advances on surge in earnings, but questions linger about cash

Published

5 hours ago

February 24, 2025

Business Finance News

Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.

David A. Grogen | CNBC

Berkshire Hathaway shares got a boost after Warren Buffett’s conglomerate reported a surge in operating earnings, but shareholders who were waiting for news of what will happen to its enormous pile of cash might be disappointed.

Class A shares of the Omaha-based parent of Geico and BNSF Railway rose 1.2% premarket Monday following Berkshire’s earnings report over the weekend. Berkshire’s operating profit — earnings from the company’s wholly owned businesses — skyrocketed 71% to $14.5 billion in the fourth quarter, aided by insurance underwriting, where profits jumped 302% from the year-earlier period, to $3.4 billion.

Berkshire’s investment gains from its portfolio holdings slowed sharply, however, in the fourth quarter, to $5.2 billion from $29.1 billion in the year-earlier period. Berkshire sold more equities than it bought for a ninth consecutive quarter in the three months of last year, bringing total sale of equities to more than $134 billion in 2024. Notably, the 94-year-old investor has been aggressively shrinking Berkshire’s two largest equity holdings — Apple and Bank of America.

As a result of the selling spree, Berkshire’s gigantic cash pile grew to another record of $334.2 billion, up from $325.2 billion at the end of the third quarter.

In Buffett’s annual letter, the “Oracle of Omaha” said that raising a record amount of cash didn’t reflect a dimming of his love for buying stocks and businesses.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote. “That preference won’t change.”

He hinted that high valuations were the reason for sitting on his hands amid a raging bull market, saying “often, nothing looks compelling.” Buffett also endorsed the ability of Greg Abek, his chosen successor, to pick equity opportunities, even comparing him to the late Charlie Munger.

Meanwhile, Berkshire’s buyback halt is still in place as the conglomerate repurchased zero shares in the fourth quarter and in the first quarter of this year, through Feb. 10.

Some investors and analysts expressed impatience with the lack of action and continued to wait for an explanation, while others have faith that Buffett’s conservative stance will pave the way for big opportunities in the next downturn.

“Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.

Berkshire is coming off a strong year, when it rallied 25.5% in 2024, outperforming the S&P 500 — its best since 2021. The stock is up more than 5% so far in 2025.