In its third-quarter earnings on Saturday, Warren Buffet's company reported a strong performance from its operating businesses, as well as a net buyer of stocks and an ongoing purchase of its shares.
Pre-tax earnings from the company's operating businesses increased 9% to $7.9 billion as revenues increased 9%. A decline in the value of the investment portfolio resulted in a net loss for the company.
Geico's losses widened and profits shrunk at the BNSF Railway and the Energy division of the company. The weakness in those areas was counterbalanced by higher income from manufacturing, service and retailing.
The conglomerate bought $9 billion of shares and sold $5.3 billion in the last three months of the year. The net outlay was the same in the second quarter as it was in the first.
In the second quarter, the company spent $1 billion on stock purchases, which was in line with the first quarter, but below the $2 billion it spent in the entire year. There has been a 4% drop in the stock of the company.
About $4 billion to $109 billion was added to the cash pile as a result of the modest spending. The conglomerate invested a lot of money in stocks in the first quarter.
During the first two years of the epidemic, private equity firms and special-purpose acquisition companies bid up the price of acquisitions, making their shares less appealing to investors.
The downturn in the stock market has been capitalized on by the company. It has amassed a $30 billion stake in Chevron and just completed its $12 billion acquisition of Alleghany.
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