Berkshire Hathaway Inc.'s continued sales of Apple Inc. shares in the third quarter left the conglomerate's stake at a fraction of its size at the start of the year.
Berkshire cut its holdings in the iPhone maker by roughly 25 per cent in the period, after slashing it by almost half in the second quarter. Apple's shares gained 10.6 per cent in the period ended Sept. 30.
Warren Buffett hinted at Berkshire's annual meeting in May that the sales of Apple in the first quarter were partly motivated by tax implications, and that the tech giant would remain the largest investment for the Omaha, Nebraska-based conglomerate.
That's still true, though Berkshire's holdings are now valued at $69.9 billion, versus $174.3 billion at the end of last year, for a decline of almost 60 per cent. Buffett hasn't disclosed his views on Apple since the annual meeting.
Apple is facing a raft of challenges, including a lack of meaningful growth for its signature iPhone. Last week, Apple told investors that it's projecting low-to-middle single-digit sales growth in the December period, falling short of estimates for the crucial holiday season.
Sales in China have fallen, while domestic competitors there have gained ground. Regulators on both sides of the Atlantic are ratcheting up scrutiny over antitrust and competition concerns. And Apple has lagged behind its rivals in artificial intelligence. Last week, Apple rolled out AI upgrades for its iPhone, iPad and Mac computers but told customers the most anticipated features won't be available until December.
"I don't think Warren Buffett's ever really been super comfortable with technology," said Jim Shanahan, an analyst at Edward Jones.
"The share sales began surely after the death of Charlie Munger," Shanahan said, referring to Buffett's longtime business partner, who died in 2023. "It just may be the case that Munger was always a lot more comfortable with Apple than Warren Buffett."
Another analyst suggested Buffett's Apple sales may be down to simple portfolio rebalancing.
Cathy Seifert, a research analyst at CFRA, said Berkshire's Apple stake was "starting to become an outsized percentage" of its overall portfolio. "I think it made sense to sort of lighten that exposure a little bit."
Berkshire Hathaway's Class A shares fell 2 per cent to $664,570 at 10:55 am in New York on Monday.
Here are some other key takeaways from Berkshire's third-quarter results:
Cash pile
Berkshire's cash pile has scaled record heights, with the world's most famous investor still struggling to find ways to spend it. The company held $325.2 billion in cash at the end of the third quarter.
Buffett said at the annual meeting that the company was in no hurry to deploy its hoard "unless we think we're doing something that has very little risk and can make us a lot of money."
Net seller
Berkshire sold a net $34.6 billion in equities during the quarter, and $127.4 billion since the beginning of the year. That's a much faster pace of disposals from last year, when net sales totaled only $24.2 billion over 12 months.
No buybacks
Buffett even declined to buy back Berkshire shares, for the first time since the company changed its policy in 2018. It bought back $345 million of its own stock in the previous period, and $1.1 billion a year ago.
The stock has gotten pricier since then. Berkshire's shares have gained roughly 25% this year, boosting its market value to $974.3 billion.
Hurricane losses
The impact of Hurricane Helene on Berkshire's earnings this quarter was $565 million.
It said Hurricane Milton is expected to result in a pretax hit of $1.3 billion to $1.5 billion for the fourth quarter.
Operating profit
Berkshire Hathaway's operating profit declined 6% from a year earlier to $10.1 billion, though a foreign-exchange-currency loss of about $1.1 billion in the period played a role.
Earnings from underwriting at the firm's collection of insurance businesses slumped 69% to $750 million, in part driven by losses at its primary insurance unit.
