Warren Buffett is sitting on more cash than ever.
His Berkshire Hathaway had almost US$85 billion on its books as of September 30, according to a regulatory filing at the weekend. That is up from the previous record of $72.7bn on June 30.
“He’s got a lot of ammo” for investments, said Bill Smead, who oversees about $2.1bn including Berkshire shares at Smead Capital Management. “Eighty-five billion dollars is a lot of money.”
The cash balance is likely to spark a fresh round of speculation about what the 86-year-old Berkshire chairman and chief executive will buy next. Over the past five decades, he has built the Omaha, Nebraska-based company into a sprawling conglomerate through dozens of acquisitions and stock picks. It now has an equity portfolio valued at about $100bn and subsidiaries that range from Dairy Queen to NetJets.
Operating earnings climbed by 6.6 per cent in the third quarter to $4.85bn, or $2,951 a share, driven by contributions from manufacturing businesses. That missed the average $3,058-a-share estimate of three analysts surveyed by Bloomberg. Net income fell by 24 per cent from a year earlier when Mr Buffett booked a large gain on an investment in Kraft Heinz.
This year, he has bought the battery-maker Duracell and Precision Castparts, a global supplier to the aerospace industry. The latter was one of his biggest acquisitions ever.
Those two businesses pushed profit at the manufacturing, service and retail segment up by 45 per cent to $1.7bn in the quarter. Aggregate earnings fell for the rest of the companies in the group, including chemical unit Lubrizol and toolmaker Iscar, according to the filing.
Some of Berkshire’s other large businesses also struggled in the quarter. The insurance group reported that underwriting profit slipped 34 per cent to $272 million as results worsened at the company’s namesake reinsurance business and auto insurer Geico. Income from Berkshire’s railroad, BNSF, fell about 12 per cent to $1.02bn on reduced demand for coal and petroleum products.
One bright spot was the utility unit, Berkshire Hathaway Energy. It contributed $932m in profit, compared with $786m a year earlier, on higher electric rates and increased wholesale volumes. The business operates electric grids in the UK, natural gas pipelines that stretch from the Great Lakes to Texas and power companies in states including Iowa and Nevada.
Part of the increase in cash during the quarter came from the sale of preferred stock in the chewing-gum maker Wrigley. The transaction was completed in late September and drove a gain of $2.35bn on derivatives and investments. A year earlier, Berkshire recorded a gain of $4.88bn in that area because of an increase in the value of its investment in Kraft Heinz.
Berkshire has said such marks are “often meaningless” and do not help in understanding its performance. Nonetheless, they were responsible for the drop in net income, which declined to $7.2bn in the third quarter from $9.43bn a year earlier.
Kraft Heinz, formed by the merger of two US food giants last year, last week posted third-quarter revenue that missed analysts’ estimates after currency fluctuations and sluggish sales in the US and Europe pressured results.
Revenue for the quarter slipped by 1.5 per cent to $6.27bn, missing analysts’ average estimate of $6.3bn. That shined a light on the company’s struggles to expand sales in a changing market, said Ken Shea, an analyst at Bloomberg Intelligence.
“The lack of top-line growth is the only thing to criticise in this report,” Mr Shea said.
Under the management of private equity firm 3G Capital, Kraft Heinz has slashed costs, following the playbook used to produce industry-leading margins at HJ Heinz before its merger with Kraft Foods. The combined group has closed factories and cut jobs as it pursues $1.5bn in cost cuts amid sluggish sales. The company is ahead of schedule on its savings programme.
Profit excluding some items rose 89 per cent to 83 cents a share, in part because of lower taxes and debt payments, the Pittsburgh-based company said.
Not all the $84.8bn in cash at Berkshire is available for investments. Mr Buffett has said that he wants to keep a cushion of at least $20bn. His company is a major seller of reinsurance, a business that requires large payouts after natural disasters and other catastrophic events.
One of the best ways for Mr Buffett to deploy the cash pile could be to purchase his company’s stock, said Jim Shanahan, an analyst at Edward Jones. Mr Buffett is authorised to buy back shares for less than 120 per cent of book value, but the company could adjust that limit.
As of September 30, book value stood at $163,783 per share. Berkshire’s Class A stock closed on Friday at $214,545, or about 31 per cent more than the measure of assets minus liabilities.
Even at that level, the stock “seems really cheap to me”, Mr Shanahan said. “There’s a lot of upside here in terms of earnings.”
* Bloomberg
business@thenational.ae
Follow The National's Business section on Twitter
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Sleep Well Beast
The National
4AD
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Virtuzone GCC Sixes
Date and venue Friday and Saturday, ICC Academy, Dubai Sports City
Time Matches start at 9am
Groups
A Blighty Ducks, Darjeeling Colts, Darjeeling Social, Dubai Wombats; B Darjeeling Veterans, Kuwait Casuals, Loose Cannons, Savannah Lions; C Awali Taverners, Darjeeling, Dromedary, Darjeeling Good Eggs
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
RESULTS
Argentina 4 Haiti 0
Peru 2 Scotland 0
Panama 0 Northern Ireland 0
UAE currency: the story behind the money in your pockets
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The%20specs%3A%202024%20Mercedes%20E200
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%20four-cyl%20turbo%20%2B%20mild%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E204hp%20at%205%2C800rpm%20%2B23hp%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C800rpm%20%2B205Nm%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E9-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E7.3L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENovember%2FDecember%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh205%2C000%20(estimate)%3C%2Fp%3E%0A
