Critical Takeaways From Berkshire Hathaway’s Third-Quarter 2023 Earnings

Berkshire Hathaway (BRK/A, BRK/B) reported a loss of $12.8 billion in the third quarter versus a loss of $2.8 billion in the same quarter of 2022. Since results are heavily impacted by gains or losses from the investment portfolio, with unrealized losses from their portfolio included in earnings, the decline in the stock market made earnings reported earnings swoon. Operating earnings, which remove the distortion from market changes and better reflect the firm’s earnings power, rose 41% for the quarter versus 2022. Providing an illustration of the value from share repurchases, per-share operating income for the quarter increased by 43% compared to 2022.

Because the pandemic negatively impacted most businesses, including Berkshire, beginning in early 2020, comparing current results to pre-pandemic 2019 results is helpful. Year-to-date operating earnings for the third quarter of 2023 are 46% above 2019. Operating earnings increased over 2019 across all primary business segments except railroad and energy. Thanks to share repurchases, operating earnings per share for year-to-date 2023 were a whopping 65% above 2019.