Warren Buffett’s Berkshire Hathaway Inc.’s third-quarter earnings fell as unrealized investment gains declined but its operating earnings climbed.
Berkshire BRK.A, +1.40% BRK.B, +1.53% reported third-quarter net earnings of $16.5 billion, or $10,119 per Class A share equivalent, from $18.5 billion, or $11,280 a share, in the year-earlier period. Last year’s third-quarter earnings surged due to unrealized investment gains.
Operating earnings, which exclude some investment results, rose to $7.9 billion from $6.9 billion in the year prior.
The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico and See’s Candies.
Berkshire’s insurance business sits at the core of its moneymaking machine. Insurance brings in billions of dollars of “float,” upfront premiums customers pay and that Berkshire invests for its own gain. Berkshire also holds large stock investments, including in Apple Inc. and Wells Fargo & Co. As of June 30, Berkshire held nearly $100 billion in financial-services stocks, underscoring the size of its bet on the future of the U.S. economy.
Class A shares closed Friday at $323,400, up 5.7% for the year. In contrast, the S&P 500 is up 22% this year.
The 89-year-old Mr. Buffett, whose shrewd investments have earned him the nickname “the Oracle of Omaha,” has built up a massive cash pile as he has struggled to find large, affordable acquisition targets. Berkshire’s insurance float was $127 billion at the end of the third quarter, up $4 billion from the end of 2018.
An expanded version of this story appears on WSJ.com.
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