Berkshire Hathaway reported a steep decline in earnings in this year’s 3rd quarter, a reflection of the current turbulence in the market and overall economic slowdown, The New York Times reports. Profits fell to $10 billion, down two-thirds from $30 billion in the same stretch of 2020.
Profits were also down at many of Berkshire’s operating businesses, the article continues, where income climbed to only 18% from a year ago, far less than the 40% hike that was predicted by some analysts, and even slower than the 21% gain in the 2nd quarter. On top of those disappointments, Berkshire also recorded almost $800 million in insurance underwriting losses as claims from bad weather increased.
Berkshire points to “ongoing global supply chain disruptions” and rising costs as the major culprits behind the reduced earnings, the Times reports. The company also didn’t make any significant acquisitions in the 3rd quarter, despite having a cash reserve of over $149 billion—a record high for the company. In fact, their largest investment in the quarter was in itself; they bought back $7.6 billion of its own shares. Though Buffett has called buybacks “immoral” in the past, the buybacks this year reflect his belief that Berkshire’s shares are currently undervalued.
