Berkshire Hathaway (BRK.B) delivered mixed third-quarter results on Saturday, with revenue beating Wall Street expectations but profits falling sharply. The Warren Buffett-built conglomerate reported $105.65 billion in revenue, up 11.24% from a year earlier and ahead of the $100.96 billion forecast. Net earnings, however, dropped 28% to $22.11 billion, highlighting some pressure beneath the strong sales growth.
The biggest concern for investors is Berkshire’s insurance business, a key source of profits and cash. Underwriting earnings fell 43% to $1.35 billion, with GEICO’s profits plunging 45% to $982 million as higher claims costs and expenses weighed on results. Insurance investment income also dropped 14% to $2.73 billion, reflecting pressure from lower interest rates.
There were some encouraging signs. Berkshire’s BNSF railroad business grew earnings 19% to $1.73 billion, while manufacturing, service, and retail profits climbed nearly 12% to $4.04 billion. These gains show that other parts of Berkshire’s broad business portfolio are holding up well, helping offset weakness in insurance.
Investors should also pay attention to Berkshire’s capital allocation. The company repurchas...