By Jonathan Stempel (Reuters) -Berkshire Hathaway signaled on Saturday that it remained cautious about markets, letting cash swell to a record $381.7 billion even as profit rose, in its last financial report before Warren Buffett bows out as chief executive. For a 12th straight quarter, Buffett's conglomerate sold more stocks than it bought for its $283.2 billion equity portfolio, whose holdings include Apple and American Express. Berkshire also did not repurchase any of its own stock, the fifth straight quarter without buybacks, though its stock price has significantly lagged the broader market. While profit topped analyst forecasts, revenue grew just 2%, slower than the overall U.S. economy's growth rate. "Berkshire, which is often considered a microcosm of the U.S. economy, isn't even keeping up," said Cathy Seifert, a CFRA Research analyst with a "hold" rating on Berkshire. "Investors will struggle to find a catalyst for this stock," she added. BUFFETT PREPARING TO BOW OUT, ABEL TO TAKE OVER Buffett, 95, is letting cash build up as he prepares to end his six-decade tenure as chief executive at the end of the year. Vice Chairman Greg Abel, 63, will succeed the legendary investor, though Buffett will remain chairman. Abel is known as a more hands-on manager than Buffett. It is unclear what he will do with Omaha, Nebraska-based Berkshire's cash, with options potentially including paying the $1.03 trillion conglomerate's first dividend since 1967. Berkshire is planning to use $9.7 billion of cash to buy Occidental Petroleum's OxyChem chemicals business, a transaction announced on October 2. NET INCOME RISES, HELPED BY GAINS ON STOCKS Third-quarter operating profit rose 34% to $13.49 billion, or about $9,376 per Class A share, from $10.09 billion a year earlier. Currency fluctuations accounted for more than two-fifths of the increase. Results benefited from lower losses in some insurance and reinsurance businesses, in part reflecting an absence of major hurricanes. The Geico car insurer reported lower gains as it spent more, possibly on advertising, to acquire new policies. Quarterly net income, including gains and losses on stock investments, rose 17% to $30.8 billion, or $21,413 per Class A share, from $26.25 billion a year earlier. Buffett downplays net results because they include gains and losses on stocks Berkshire is not selling. This adds volatility, and Buffett believes net results are useless in understanding his company. STOCK PRICE LAGS BROADER MARKET Investors have voted their apprehension about Berkshire's outlook and pending management change by selling its stock. Since Buffett announced on May 3 he would step down, Berkshire's stock price has fallen 12%, and trailed the Standard & Poor's 500 by 32 percentage points. For all of 2025, Berkshire is 11 percentage points behind the index. "Impatient investors feel an urgent need for Berkshire to deploy its cash, and have been casting their nets elsewhere," said Tom Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, which invests $10 billion. Russo has owned Berkshire stock since 1982 and said Berkshire remains "extremely well-positioned" for the long term. "Berkshire isn't going to deploy capital that won't increase intrinsic value on a per share basis," he said. "Knowing that guides Berkshire means investors won't have to second-guess it." Berkshire owns close to 200 businesses that also include utility and renewable operations, chemical and industrial companies, and familiar consumer brands such as Dairy Queen, Fruit of the Loom and See's Candies. It has not made a huge acquisition since paying $32.1 billion for Precision Castparts in 2016, though it later bought Pilot Travel Centers for $13.6 billion and the Alleghany insurance holding company for $11.5 billion. (Reporting by Jonathan Stempel in New York; Editing by Alden Bentley and Joe Bavier)
(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
