Berkshire Hathaway significantly increased its share repurchases in the third quarter, despite a decline in operating earnings. The company, led by Greg Abel, spent $9.6 billion on buybacks, more than double the $4.5 billion from the previous quarter. This brings the total buybacks for 2026 to about $14.4 billion. The increase in share repurchases came amid a year-over-year drop in operating profits, driven by a decline in insurance underwriting and investment income.
Operating earnings for Berkshire fell 5.8% to $12.705 billion, with insurance underwriting dropping 43% to $1.352 billion. Insurance investment income also declined by 14% to $2.734 billion. However, the company's railroad, energy, and manufacturing divisions saw year-over-year earnings growth. Overall earnings, which include the stock portfolio, fell 28% to $22.112 billion, with investment gains dropping nearly 50% to $9.407 billion.
Despite the earnings decline, Berkshire's stock has outperformed the broader market. Class A shares have risen over 12% in the past month, while the S&P 500 has dropped 5.5% in the same period. Year-to-date, Berkshire has gained 13%, outpacing the S&P 500's 7.8% rise. The company's top five equity holdings remained unchanged, including Alphabet, Apple, and Coca-Cola. Berkshire's cash reserves also increased by 3% to $377.435 billion, though excluding certain components, cash holdings fell 1.9% quarter-over-quarter.
The surge in buybacks suggests management's confidence in the company's long-term value, even amid short-term earnings challenges. The strategy may signal a move to support the stock price and enhance shareholder value, despite the broader market's recent volatility. Investors will be watching closely to see if this trend continues into the next quarter.