Buffett sells Apple, Bank of America

Warren Buffett and Berkshire Hathaway extended their retreat from stocks in the third quarter, slashing their holdings in Apple and boosting cash to a record $325.2 billion.

Berkshire also reported a 6.0 per cent decline in quarterly operating profit, largely the result of higher insurance underwriting liabilities including for Hurricane Helene, and currency losses from a strengthening US dollar.

These offset improved profitability at the Geico car insurer, where accident claims and expenses fell. Profit also rose at the BNSF railroad, which shipped more consumer goods, and Berkshire Hathaway Energy, where operating expenses declined.

In its quarterly report on Saturday, Berkshire said it sold about 100 million, or 25 per cent, of its Apple shares over the summer, ending with about 300 million.

It has now sold more than 600 million of the iPhone maker’s shares in 2024, though Apple remained Berkshire’s largest stock holding, at $69.9 billion.

The sales comprised a large portion of the $36.1 billion of stock, including several billion dollars of Bank of America shares, that Berkshire sold in the quarter.

Buffett said in May that he expected Apple to remain Berkshire’s largest stock investment, but selling made sense because the 21 per cent federal tax rate on the gains would likely grow.

Berkshire bought just $1.5 billion of stock in the quarter, the eighth straight where it was a net seller of stocks.

It also repurchased none of its own stock, suggesting that Buffett doesn’t view even his own company’s shares as a bargain.

HELENE, MILTON

Operating profit from Berkshire’s dozens of businesses fell to $10.09 billion, or about $7,019 per Class A share, from $10.76 billion a year earlier.

Insurance underwriting profit fell 69 per cent, dented by rising claims, $565 million of losses from Helene, and a bankruptcy court settlement related to defunct talc supplier Whittaker Clark & Daniels.

This more than offset a near doubling of underwriting profit at Geico.

Berkshire also projected $1.3 billion to $1.5 billion of pre-tax losses in the fourth quarter from Hurricane Milton, which slammed into Florida in October.

Net income totaled $26.25 billion, or $18,272 per Class A share, compared with a loss of $12.77 billion, or $8,824 per share, a year earlier when falling stock prices reduced the value of Berkshire’s investments.

Buffett has said operating results better reflect Berkshire’s performance.

Accounting rules require Berkshire to report unrealized investment gains and losses when it reports net income, adding volatility that Buffett counsels investors to ignore.

Buffett, 94, has led Berkshire since 1965, and is expected to eventually transfer leadership to Vice Chairman Greg Abel, 62.

The Omaha, Nebraska-based conglomerate’s businesses also include Berkshire Hathaway Energy, many industrial and manufacturing companies, a big real estate brokerage, and retail businesses such as Dairy Queen and Fruit of the Loom.