MORE CASH
Net income equaled $24,377 per Class A share and rose from $5.58 billion, or $3,784 per share, a year earlier. That in part reflected a 27% jump in Apple's stock price, leaving Berkshire with a $151 billion stake in the iPhone maker. An accounting rule requires Berkshire to report unrealized gains and losses with net results, and Buffett urges investors to ignore the resulting volatility. Quarterly operating profit increased 13% to $8.07 billion, or about $5,561 per Class A share, from $7.16 billion. Those results benefited from Geico snapping a six-quarter string of underwriting losses, and a 68% increase in how much Berkshire's insurance units generate from investments. Geico's pretax underwriting gain was $703 million, benefiting from higher premiums, fewer crashes and a significant drop in ad spending, which may have led to fewer high-risk drivers seeking coverage.
Berkshire's cash hoard grew $2 billion in the quarter to $130.6 billion, as the company sold $13.3 billion of stocks and bought just $2.9 billion. Chevron appears to have been among the sales, with Berkshire's stake falling 28% to $21.6 billion though the oil company's stock price dropped just 9%. Berkshire also owns a 23.6% stake in another oil company, Occidental Petroleum Corp .
Its stock sales more than offset the $8.2 billion Berkshire spent to boost its stake in truck stop operator Pilot Travel Centers to 80% from 38.6%, leaving the founding Haslam family with 20%. The increase was expected.
IMPACT OF WILDFIRES
Profit at the BNSF railroad fell 9% to $1.25 billion,
hurt by higher fuel costs and lower shipping volumes.
Berkshire Hathaway Energy, normally a steady earnings
generator, saw profit fall 46% as it set aside $359 million for
legal and other costs from wildfires in Oregon and northern
California, where it has multiple operations, in 2020.
Operating results also reflected October's purchase of insurance holding company Alleghany Corp, while net results included a gain related to Pilot.
Berkshire's Class A shares have risen 4.9% this year, trailing the Standard & Poor's 500's 7.7% gain. The index lagged Berkshire by 23.4 percentage points in 2022, excluding dividends. (Reporting by Jonathan Stempel in Omaha, Nebraska; Editing by Alexander Smith and Diane Craft)
Messaging: jon.stempel.thomsonreuters.com@reuters.net))