Berkshire Hathaway reported on Saturday that its operating earnings fell 5.8% in the third quarter to $12.71 billion, as a sharp drop in insurance underwriting outweighed growth at its railroad, energy and manufacturing businesses. At the same time, the Omaha conglomerate accelerated its share buybacks, spending $9.6 billion repurchasing its own stock in the quarter — a sign that chief executive Greg Abel is putting Berkshire's vast cash pile to work more aggressively than his predecessor.
Net earnings, which include the paper gains and losses on Berkshire's huge stock portfolio, fell 28% to $22.11 billion from $30.80 billion a year earlier, according to the company's earnings release published on Saturday morning. Berkshire itself cautions investors against reading too much into that headline figure: investment gains in any given quarter, it said, are "usually meaningless" and can deliver net-earnings figures that are "extremely misleading".
The results are the third quarterly report since Abel, 64, became chief executive, and the first full quarter since Warren Buffett, 96, stepped down as chairman in September. Buffett remains chairman emeritus. The quarter shows Abel moving faster than Buffett did in his final years at the helm — buying back stock, buying businesses and adding to Berkshire's equity portfolio, even as the insurance engine that funds much of the empire hit a rough patch.
Insurance drags on the quarter
Insurance was the main reason operating profit declined, Reuters reported. Profit from Berkshire's insurance businesses fell 26% in the quarter. Underwriting profit — the money earned from selling insurance after paying claims and expenses — fell 43% to $1.35 billion from $2.37 billion a year earlier, according to the company's own figures.
Geico, Berkshire's big auto insurer, was the centre of the weakness. Its underwriting profit fell 45% before tax, Reuters reported, as accident losses rose and advertising spending increased. Insurance investment income also slipped, down 14.1% to $2.73 billion from $3.18 billion, as the returns on the portfolio that Berkshire's insurance float funds came under pressure.
The insurance float — the premiums Berkshire holds before paying claims, which it invests for its own account — stood at about $178.5 billion at the end of September, up about $2.1 billion since the end of 2025, the company said.
Why insurance matters so much: Berkshire's insurance businesses do more than sell policies. The premiums they collect arrive long before claims are paid, giving Berkshire a vast pool of low-cost money — the float — to invest in stocks and whole businesses. When underwriting is profitable, that money effectively costs nothing. When claims surge, as they did this quarter, the engine still runs, but more slowly.
The rest of the empire held up
Outside insurance, Berkshire's operating businesses mostly grew. The railroad BNSF was the standout: after-tax earnings rose 19.3% to $1.73 billion from $1.45 billion, on higher freight volumes. Berkshire Hathaway Energy earned $1.61 billion, up 8.3%, and the manufacturing, service and retailing group — which spans everything from home builders to industrial suppliers — earned $4.04 billion, up 11.8%.
| Business (after-tax earnings) | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Insurance — underwriting | $1.35bn | $2.37bn | −42.9% |
| Insurance — investment income | $2.73bn | $3.18bn | −14.1% |
| BNSF railroad | $1.73bn | $1.45bn | +19.3% |
| Berkshire Hathaway Energy | $1.61bn | $1.49bn | +8.3% |
| Manufacturing, service and retailing | $4.04bn | $3.62bn | +11.8% |
| Other | $1.24bn | $1.38bn | −10.5% |
| Operating earnings | $12.71bn | $13.49bn | −5.8% |
For the first nine months of the year, the picture looks stronger: operating earnings of $37.03 billion were up 8.0% on the same period of 2025, and net earnings of $57.89 billion were up from $47.77 billion. The quarterly dip, in other words, sits inside a year that remains solidly ahead.
Buybacks accelerate under Abel
The clearest signal in the release was the pace of share repurchases. Berkshire bought back about $9.6 billion of its own stock in the third quarter, on top of $4.8 billion earlier in the year, taking the nine-month total to about $14.4 billion. It bought about $2 billion more in the first four weeks of October, Reuters reported.
That marks a change of tempo. Buffett, who ran Berkshire for 60 years, had difficulty finding things to buy toward the end of his tenure, and buybacks slowed. Abel, Reuters noted, "has appeared more willing to spend Berkshire's cash than his predecessor". The company's biggest year for buybacks remains 2021, when it repurchased $27 billion of stock — a record the current pace could approach if the fourth quarter keeps up.
Buybacks are, in effect, Abel's answer to the question that has dogged Berkshire for years: what to do with a cash pile no other company can match. Berkshire ended September with $356.9 billion of cash and equivalents, Reuters reported, down from $380.2 billion at the end of March as the money went out the door — into buybacks, acquisitions and stock purchases.
"Berkshire accelerated stock repurchases in the third quarter, finding its own shares among the best assets to invest in its huge cash pile, while lower results from its insurance businesses weighed on overall profit." — Reuters
Abel is spending — on stocks, railways and deals
The buybacks are only part of the deployment. Berkshire's purchases this year have included billions of dollars of Alphabet shares, to help Google's parent expand in artificial intelligence, Reuters reported — although the stock trades below the discounted prices Berkshire paid. In July, Abel spent $6.8 billion buying home builder Taylor Morrison, and Berkshire has taken a 4% stake in the Italian software technology company Bending Spoons.
The shift is a deliberate one. Under Buffett, Berkshire spent 14 consecutive quarters as a net seller of stocks before turning into a net buyer earlier this year. Abel's message, written in the numbers rather than in words, is that the cash will now be put to work — whether on Berkshire's own shares, on listed equities like Alphabet, or on whole businesses like Taylor Morrison.
Operating profit vs net profit: Berkshire reports both, and the gap matters. Operating earnings strip out investment gains and losses, showing what the underlying businesses earned. Net earnings include the change in value of stocks Berkshire still owns — a number that swings with the market and, in Berkshire's own words, says little about how the businesses performed in the quarter.
What to watch next
Investors will get their first chance to react on Monday, when US markets reopen after the weekend. The shares have been trading near record highs, and the buyback pace will be read as a signal of Abel's confidence in the stock's value. The company's full 10-Q filing, which Berkshire urges investors to read alongside the summary release, will carry the detail — including the breakdown of the equity portfolio and any further stock purchases in October.
Longer term, the questions are the same ones Abel inherited: whether insurance underwriting recovers from a costly quarter, whether the railroad and energy businesses can keep growing, and whether the cash pile — still more than $350 billion — finds a home in something bigger than buybacks. For now, the answer Berkshire has given is the simplest one available: its own shares.
Frequently asked questions
Why did Berkshire's profit fall if most of its businesses grew?
Because insurance, its largest profit engine, had a weak quarter. Underwriting profit fell 43% as claims — above all at Geico — rose faster than premiums, and insurance investment income fell too. Growth at the railroad, energy and manufacturing businesses was not enough to offset that decline.
What is the difference between operating earnings and net earnings?
Operating earnings show what Berkshire's businesses earned, excluding gains and losses on its stock investments. Net earnings include those investment gains and losses, including paper gains on shares it has not sold. Berkshire says the investment figure in any single quarter is "usually meaningless" for judging business performance.
Why is Berkshire buying back so much of its own stock?
With more than $350 billion in cash and few large acquisitions available at prices it likes, Berkshire's management regards its own shares as one of the best investments available. Buybacks also shrink the share count, raising the value of each remaining share. The $9.6 billion spent in the third quarter was the fastest quarterly pace of the Abel era.
Who runs Berkshire now?
Greg Abel, 64, is chief executive, in his third quarter in the role. Warren Buffett, 96, stepped down as chairman in September and remains chairman emeritus.
Key takeaways
- Berkshire's operating earnings fell 5.8% to $12.71 billion in Q3 2026, dragged down by a 43% drop in insurance underwriting profit, above all at Geico.
- Net earnings fell 28% to $22.11 billion, but that figure includes paper investment gains that Berkshire itself calls "usually meaningless" in a single quarter.
- The railroad, energy and manufacturing businesses all grew — BNSF earnings rose 19.3% to $1.73 billion.
- Buybacks accelerated sharply: $9.6 billion in the quarter, about $14.4 billion over nine months, plus about $2 billion more in early October.
- Cash and equivalents stood at $356.9 billion at the end of September, down from $380.2 billion at the end of March as Abel put the money to work.
