Buffett Spends $928 Million to Buy His Own Shares Back

Buffett Spends $928 Million to Buy His Own Shares Back

A new company policy in July gave Buffett more leeway to buy back Berkshire's stock, and he repurchased US$928 million worth in the quarter.

With Berthshire Hathaway flush in cash, it repurchased almost $1 billion in stock: 225 Class A shares and 4.1 million Class B shares. Insurance underwriting this year was $441 million, compared to $1.439 last year, due largely to a series of devastating hurricanes.

Buffett has long said Berkshire's operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely.

Last year, Berkshire reported net earnings of $44.9 billion.

Shares of NYSE BRK.B traded up $1.13 during midday trading on Friday, hitting $209.83.

The Omaha-based company's revenue grew to $63.45 billion in the quarter, which was up from $59.5 billion past year.

"Overall, it's a very strong report", said Andy Kilpatrick, a retired stockbroker and author who wrote "Of Permanent Value: The Story of Warren Buffett".

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Berkshire warned that insurance losses due to Hurricane Michael are now estimated in the $350 million to $550 million range for the fourth quarter. The biggest boost came from the insurance division, where catastrophe costs fell nearly 90% from last year's disastrous third quarter, the sharpest decline among all major publicly-traded USA insurers.

Berkshire Hathaway reported earnings of $1.40 per share in the same quarter last year, which suggests a positive year-over-year growth rate of 76.4%.

On Wednesday, Barclays' managing director Jay Gelb forecast that Berkshire would show "enormous" net income of about $19 million - close to a record for any company - largely because of unrecognized gains in its equity portfolio.

Q3 earnings benefited from an $11.4B investment gain that's now required to be reported in net earnings. And the company's book value per Class A share was $228,712 on September 30, higher than $217,677 one quarter ago.

Edward Jones analyst Jim Shanahan said investors will appreciate that Buffett followed through on the new buyback program and purchased shares.

Berkshire Hathaway Inc. owns more than 90 companies, including the railroad and clothing, furniture and jewelry businesses.

Berkshire Hathaway Inc is a holding company owning subsidiaries engaged in various business activities. The company also has major investments in such companies as Apple, American Express, Coca-Cola and Wells Fargo & Co.

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