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. Between July and September, Buffett's conglomerate also sold more stocks than it bought for its $283.2 billion equity portfolio, whose holdings including Apple and American Express, the 12th straight quarter it was a net seller. Berkshire also repurchased none of its own stock, the fifth straight quarter without buybacks, though its stock price has significantly lagged the broader market. 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 remains unclear how he might spend Berkshire's cash, which could include paying the Omaha, Nebraska-based 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 in early October. 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. Operating results benefited from lower loss projections in some of Berkshire's insurance and reinsurance businesses, though the Geico car insurer reported lower underwriting gains as it spent more 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. 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)
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