Berkshire buys back $9.6 billion as operating earnings fall

Berkshire Hathaway spent about $9.6 billion buying back its own shares in the third quarter, sharply increasing repurchases even as weaker insurance results pushed operating earnings lower.

Operating earnings fell 5.8% to $12.705 billion from $13.485 billion a year earlier, according to the company’s third quarter results. Gains in rail, energy and manufacturing helped offset the insurance decline but were not enough to prevent the overall fall.

The results bring together two different stories: uneven performance across Berkshire’s businesses and a larger commitment of capital to its own stock. The buybacks took the total for the first nine months of 2026 to approximately $14.4 billion.

For investors, the question is not simply whether management is buying more shares. It is whether the price paid offers better value than the other uses available for that cash.

Insurance weighs on the quarter

Insurance underwriting earnings fell to $1.352 billion from $2.369 billion in the same quarter a year earlier. Insurance investment income also declined, to $2.734 billion from $3.181 billion.

The two figures reflect different parts of the business. Underwriting earnings arise from insurance operations, while investment income comes from assets held by those operations. Declines in both reduced their contribution to Berkshire’s overall result.

Reuters’ coverage of the earnings describes pressure at Geico, including higher accident losses and advertising spending. The company’s own figures provide the clearest starting point for measuring how much insurance contributed to the quarterly decline.

One quarter does not establish a lasting deterioration. It does, however, make the direction of insurance earnings an important issue for subsequent results.

Stronger results elsewhere

Berkshire’s other large operating businesses provided a counterweight. BNSF earnings increased to $1.729 billion from $1.449 billion, while Berkshire Hathaway Energy earned $1.612 billion, up from $1.489 billion.

Manufacturing, service and retailing earnings rose to $4.042 billion from $3.616 billion. Those gains underline the limits of describing the quarter as a decline across the entire company.

The longer comparison was also stronger. Operating earnings for the first nine months rose to $37.034 billion from $34.286 billion, an increase of about 8% calculated from the disclosed figures.

Berkshire therefore reported a weaker third quarter within a stronger first nine months. Both comparisons matter when assessing the direction of a group whose businesses face different customers, costs and economic conditions.

Why net earnings fell more sharply

Net earnings declined to $22.112 billion from $30.796 billion, a fall of about 28%. That measure includes investment gains and losses, making it more sensitive to movements in Berkshire’s investment portfolio.

Accounting rules require changes in the unrealized value of equity holdings to pass through earnings. Share prices can consequently have a large effect on the headline result even when Berkshire has not sold the investments concerned.

Berkshire has long urged investors to distinguish those movements from the performance of its operating businesses. Its release makes that warning again, explaining why a single quarter’s investment gains can distort comparisons.

Operating earnings are a measure defined by the company that excludes certain items, rather than a replacement for the full accounting result. Reading the two together gives a fuller picture than selecting whichever presents the most favourable trend.

What shareholders gain from buybacks

Repurchases reduce the number of shares outstanding, increasing the proportionate ownership represented by each remaining share. Whether that benefits continuing shareholders depends on the price Berkshire pays relative to the value of the business.

The purchase also has an opportunity cost. Cash used for buybacks is no longer available for acquisitions, investment in subsidiaries or additional financial reserves.

The $9.6 billion spent in the quarter accounted for about two thirds of Berkshire’s repurchases over the first nine months, using the rounded totals in the release. It marks a substantial acceleration in that use of capital, but does not independently establish that the shares were undervalued.

Reuters presents the larger repurchases as a notable capital allocation decision under chief executive Greg Abel. Assessing the decision will require more than the spending total: investors will need to consider the purchase prices, business prospects and alternatives available to the group.

A broad view, not the whole economy

Berkshire’s mix of insurance, rail, energy and industrial businesses makes its earnings useful to investors following several parts of the US economy. Its results remain company specific, however, and should not be treated as a complete economic survey.

The company also warns that its short earnings release is insufficient for an informed investment judgment and directs readers to the full quarterly filing. That is especially relevant when weighing the insurance decline against stronger results elsewhere.

The quarter leaves a clear set of issues to follow: whether insurance performance improves, whether the stronger businesses maintain their progress and whether the larger buybacks prove a good use of shareholders’ money.