Berkshire Hathaway more than doubles buybacks in third quarter as earnings decline

A share buyback happens when a company purchases its own shares, usually in the market. The company spends cash to reduce the number of shares held by outside investors. Berkshire’s $9.6 billion purchase therefore represents a major return of capital to shareholders through stock repurchases rather than dividends.

Berkshire bought more than twice as much stock in the third quarter as in the second quarter. The purchases brought its 2026 buybacks to about $14.4 billion. In practical terms, Berkshire became a buyer of Berkshire shares, using its financial resources to acquire part of itself.

Buybacks can change the ownership structure. With fewer shares outstanding, each investor who keeps their shares owns a larger percentage of the company, assuming no new shares are issued. The article does not state how many shares Berkshire retired or whether the repurchases changed earnings per share. It does show that buybacks accelerated while profits declined.

Berkshire repurchased $9.6 billion of stock in the third quarter, compared with $4.5 billion in the second quarter. That is an increase of $5.1 billion and more than double the earlier quarter’s amount. The spending also brought Berkshire’s total buybacks for 2026 to about $14.4 billion.

The buyback was large, but smaller than Berkshire’s cash pile. Reported cash holdings reached $377.435 billion at the end of the third quarter, up from $365.514 billion in the second quarter. The $9.6 billion repurchase was therefore about 2.5% of reported cash. Using Berkshire’s narrower cash figure, the comparison is larger but still limited.

Excluding rail and utility cash and T-bill payables, Berkshire held $352.3 billion. That adjusted amount was down 1.9% from the previous quarter. Even with the repurchase, the company’s reported cash hoard grew because cash generation and other changes exceeded the buyback spending.

Current earnings and available cash are related but not identical. A company can have lower profits in one period and still possess cash accumulated over many years. It can use that cash for buybacks without needing current-quarter earnings to rise. Berkshire’s third-quarter results show that distinction clearly.

Operating earnings fell 5.8% to $12.705 billion, and overall earnings fell 28% to $22.112 billion. Yet Berkshire repurchased $9.6 billion of stock. Its reported cash holdings also increased from $365.514 billion to $377.435 billion. That means the buyback did not prevent the reported cash balance from growing during the quarter.

The article does not state Berkshire’s exact reason for accelerating purchases. It does show that buybacks can continue during an earnings decline when a company has substantial liquidity. Berkshire’s adjusted cash, excluding rail and utility cash and T-bill payables, was $352.3 billion, down 1.9%, so the cash picture depends on the measure used.

Operating earnings measure profits from Berkshire’s wholly owned businesses. These include insurance, railroads, energy, and manufacturing operations. Overall earnings are broader. They include operating results plus gains and losses from Berkshire’s large stock market portfolio, so they can move differently from profits generated by its businesses.

In the third quarter, operating profits totaled $12.705 billion, down from $13.485 billion. Overall earnings were $22.112 billion, down from $30.796 billion. Investment gains contributed $9.407 billion to the overall result, although those gains fell nearly 50% year over year. The two figures therefore answer different questions about performance.

Operating earnings show how Berkshire’s owned companies performed during the period. Overall earnings also reflect changes in its market investments. Because stock prices can rise or fall sharply, overall earnings may be more volatile. Berkshire’s third-quarter decline shows why both measures matter when assessing the conglomerate.

Insurance contributes to operating earnings in two important ways. Underwriting reflects the result from the insurance business itself, while investment income comes from investing insurance-related funds. When either falls, Berkshire receives less operating profit from insurance. Both declined sharply in the third quarter.

Insurance underwriting dropped 43% year over year to $1.352 billion. Insurance investment income declined 14% to $2.734 billion. Combined, those categories produced $4.086 billion, compared with about $5.129 billion a year earlier. That is a decrease of roughly $1.043 billion, before considering other operating items.

Berkshire’s total operating profits fell from $13.485 billion to $12.705 billion, a 5.8% decline. The drop in insurance results was a major drag, although railroad, energy, and manufacturing earnings all grew year over year. Those gains partly offset the weaker insurance performance but did not prevent an overall operating decline.

When a company buys and retires its own stock, the number of outstanding shares falls. Each investor who keeps their shares then represents a larger percentage of the company. For example, if 10% of shares disappear and an investor sells none, that investor’s ownership percentage increases because the total share count is smaller.

The same mechanism affects earnings per share, or EPS. EPS divides company earnings by shares outstanding. If earnings stay constant while the denominator shrinks, EPS increases. If earnings fall, as Berkshire’s did, the effect depends on whether the share reduction is large enough to offset the earnings decline. The article does not provide Berkshire’s EPS or retired-share count.

Buybacks do not automatically improve the company’s underlying operations. Berkshire’s operating earnings fell 5.8%, and overall earnings fell 28% in the third quarter. The $9.6 billion repurchase may still reduce the share denominator, but the article does not quantify its effect on ownership percentages or EPS.

Berkshire is not a single-line business. Its wholly owned operations include insurance, railroads, energy, and manufacturing. It also owns a sprawling stock market portfolio. This combination gives Berkshire several sources of earnings, unlike a typical company whose results may depend mainly on one industry or product.

The mix was visible in the third quarter. Insurance underwriting fell 43%, and insurance investment income fell 14%. Meanwhile, Berkshire’s railroad, energy, and manufacturing businesses all reported year-over-year earnings growth. The stock portfolio added $9.407 billion in investment gains, though those gains were nearly 50% lower than a year earlier.

These businesses can move in different directions, producing a result unlike the broader market. Berkshire’s overall earnings fell 28%, even as its stock gained 13% year to date and the S&P 500 gained 7.8%. Recently, Berkshire rose more than 12% in a month while the index fell 5.5%, amid a rotation out of technology stocks.