Warren Buffett is sitting on over $325 billion cash as Berkshire Hathaway keeps selling Apple stock

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OMAHA, Neb. (AP) — Warren Buffett now has more than $325 billion in cash after continuing to unload billions of dollars’ worth of Apple and Bank of America stocks this year and continuing to collect a steady stream of dividends from all of Berkshire Hathaway’s stocks. Diversified business without finding any major acquisitions.

Berkshire said it sold about 100 million additional Apple shares in the third quarter after halving its huge investment in the iPhone maker last quarter. The remaining stake of roughly 300 million shares worth $69.9 billion at the end of September remains Berkshire’s largest single investment, but has been significantly reduced since the end of last year when it was worth $174.3 billion.

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Investors will also be disappointed to learn that Berkshire did not repurchase any of its stock during the quarter.

Shareholders will wonder why Buffett continues to accumulate so much money, said Cathy Seifert, CFRA research analyst. “Are they more pessimistic about the future economic and market picture than others?” she said.

Buffett said at the annual meeting in May that part of the reason he started selling some of his Apple shares is because he expects tax rates to rise in the future. But Edward Jones analyst Jim Shanahan said he wondered if part of the reason Buffett started selling Apple was related to the death of Vice Chairman Charlie Munger last year because sales began so soon after Munger’s death. Shanahan said Buffett has never been as comfortable with technology companies as his longtime partner was.

“If Charlie Munger were still alive, he probably wouldn’t have sold his position so forcefully — perhaps ever,” Shanahan said.

Berkshire said Saturday that investment gains pushed third-quarter earnings back up to $26.25 billion, or $18,272 per Class A share. A year ago, unrealized paper investment losses reduced the Omaha, Nebraska-based group’s earnings to a loss of $12.77 billion, or $8,824 per Class A share.

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Buffett has long recommended investors pay more attention to Berkshire’s operating profits if they want to get a good idea of ​​how the companies it owns are performing because those numbers exclude investments. Berkshire’s earnings numbers can vary widely from quarter to quarter along with the value of its investments regardless of whether the company has bought or sold anything.

By that measure, Berkshire said its operating profit fell just 6% to $10.09 billion, or $7,023.01 per Class A share. This compares to $10.8 billion last year, or $7,437.15 per Class A share.

The four analysts surveyed by FactSet Research expected Berkshire to report operating earnings of $7,335.11 per Class A share.

Berkshire’s revenue was little changed at $92.995 billion. A year ago, it reported revenues of $93.21 billion. That figure exceeds revenue of $92.231 billion expected by three analysts surveyed by FactSet.

Berkshire owns a variety of insurance companies, including Geico, along with BNSF Railway, several major utilities and a variety of retail and manufacturing companies, including brands such as Dairy Queen and See’s Candy.

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One of Berkshire’s insurers, Guard, reported some additional losses in previous years after managers reevaluated its policies.

Berkshire solved one mystery from the quarter by clarifying how much it paid to acquire the rest of the shares in its utilities business from the ownership of former Berkshire board member Walter Scott.

Berkshire said it paid $2.4 billion in cash, issued $600 million in debt and gave the Scott family Class B Berkshire shares worth just over $1 billion. Thus, the total compensation amounted to approximately $4 billion. That means the Scott family didn’t get as good a price for its 8% stake in the utilities as it did when Berkshire Vice Chairman Greg Appel sold his 1% stake in the utilities business two years ago for $870 million.

Abel is set to succeed Buffett, 94, as CEO in the event of his death.

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