3 Things to Know About Berkshire Hathaway’s Q3 2024 Results

TradingKey - For passionate investors worldwide, the world’s best long-term investors is widely recognised as being Warren Buffett. The conglomerate that he’s Chairman and CEO of – Berkshire Hathaway Inc (NYSE: BRK.B) – is one of the world’s biggest companies.

Berkshire owns a whole host of companies in various sectors, mainly in the industrials, financials and consumer sectors. Since 2016, the conglomerate has also built up a large stake in technology giant Apple Inc (NASDAQ: AAPL) but has started to sell that down in 2024.

Investors were watching whether Berkshire offloaded more of it Apple stake, as well as the size of its cash pile, when the company reported its Q3 2024 earnings on Saturday (2 November). Here are three things investors should know about Berkshire Hathaway’s latest numbers.

Cash hits record of US$325 billion

At the end of the second quarter of 2024 (30 June 2024), it was revealed that Berkshire’s cash pile had grown to a record US$277 billion.

Well as of the end of Q3 2024, Berkshire has now set a new record for its cash pile as it hit US$325.2 billion. That was a rise of just over US$48 billion from its previous record.

That cash pile grew due to Berkshire selling more of its Apple stake but also offloading a significant portion of its stake in Bank of America Inc (NYSE: BAC) that allowed it to rake in US$10 billion. Overall, Berkshire sold US$36.1 billion worth of stock during the period.

In terms of Berkshire’s businesses, it was broadly stable as the conglomerate posted operating earnings of US$10.1 billion for Q3 2024 – down 6% year-on-year due to weaker-than-normal insurance underwriting. 

Sells 25% of Apple stake

The ongoing disposal of Berkshire’s Apple stake continued apace in Q3 2024 as it was revealed that the firm sold 100 million Apple shares during the quarter. That translated to a 25% reduction in Berkshire’s stake in the iPhone giant. 

That also followed a second-quarter 2024 reduction of nearly 50% in its stake in Apple. For Berkshire, its remaining Apple stake is still worth US$67 billion – slightly just over 20% of the firm’s equity portfolio that’s worth around US$300 billion. Earlier this year, Apple had made up 45% of its overall equity portfolio.

However, it’s also estimated that Berkshire will have to pay some big taxes on its Apple sales – with the numbers being in a range of US$15 billion to US$20 billion.

No share buybacks

As evidence of perhaps Buffett’s wariness on the valuations of markets, Berkshire did not repurchase any of its shares during the third quarter of 2024. 

Its buyback activity had already slowed in Q2 2024 and the company stated that the firm will buy back stock when Chairman Buffett “believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined”.

The company had bought back US$345 million worth of shares in Q2 2024 and had recorded buybacks of US$2.6 billion for Q1 2024. The cessation of buybacks in the latest quarter indicates the cautious approach that the company is taking to the current market.

Solid results, business as usual

For Berkshire Hathaway, the quarter came in as expected with operating earnings only slightly missing analysts’ estimates. However a portion of the insurance underwriting weakness could be attributed to the impact of Hurricane Helene in the US during the reported period.

The big news was the further divestment of its Apple stake as well as the record cash pile that the company has now amassed. Heading into the US election and uncertainty around the interest rate cycle, it appears that Berkshire is taking a more conservative approach to how it views the US economy and stock market.