Berkshire Hathaway (NYSE:BRK.A), the holding company of famed investor Warren Buffett, is scaling back its stock buyback program even as it accumulates a record amount of cash.
Berkshire Hathaway’s cash pile rose 5.2% in the first quarter of this year to a record $145.4 billion U.S. Buffett has struggled to keep up with Berkshire’s ever-growing cash flow in recent years.
That’s led Buffett to repurchase significant amounts of Berkshire stock. He set a record in the third quarter of last year, buying back $9 billion U.S. of stocks, but slowed that pace during the first quarter with repurchases of $6.6 billion U.S.
Berkshire Hathaway repurchased more stock in January and February than the company did in March, when the stock climbed nearly 5.8%, according to regulatory filings. Buffett’s long been disciplined on the price of buybacks, noting in 2018 when the company loosened its repurchase policy that he and his long-time business partner and Berkshire Vice Chairman Charlie Munger can repurchase shares when they’re below Berkshire’s intrinsic value.
Berkshire has come up short on well-priced and sizable acquisitions in recent years. The company struck a deal last year to buy some natural gas assets from Dominion Energy (NYSE:D) and invested in some Japanese trading companies. But that’s it.
Still, Berkshire’s businesses pulled off a strong quarter, with earnings reaching the second-highest level since 2010. Operating profit of about $7.02 billion U.S. was only surpassed by the third quarter of 2019. The gains were partly fueled by the firm’s insurers and its group of manufacturers, servicing businesses and retailers.
Net earnings, which reflect Berkshire’s $282 billion U.S. equity portfolio, swung to a profit of $11.7 billion U.S. in the quarter, compared to a loss of $49.7 billion U.S. a year earlier, when the pandemic caused stocks to slump.
Berkshire Hathaway’s Class A shares climbed almost 11% in the first quarter, outpacing the 5.8% gain in the S&P 500 during the same time.