Berkshire Hathaway Earnings: Cash Levels Retreat Again as Acquisitions and Share Buybacks Pick Up

Key Morningstar Metrics for Berkshire Hathaway

• Fair Value Estimate: $765,000/ $510
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Low

What We Thought of Berkshire Hathaway’s Earnings

Narrow-moat Berkshire Hathaway BRK.A BRK.B reported adjusted third-quarter operating results slightly better than our expectations, with the firm continuing to benefit from solid underwriting results in its insurance businesses despite prices declining over the past year.

Why it matters: Berkshire has historically offset underperformance in one or more of its segments with outperformance in others.

• After several years of outstanding results, insurance operations have seen pricing come down over the past year or so, but with no discernible catastrophe losses in the third quarter, underwriting results were still solid.
• BNSF continues to trail Union Pacific on profitability, despite another improvement in its operating ratio, with the gap in profitability between the two firms at just over 400 basis points on a preliminary basis in the third quarter.
• Berkshire Hathaway Energy, meanwhile, produced steady results during the third quarter, but future results could still be adversely affected by wildfire litigation and legislation that has curbed investments in renewables.
• The manufacturing, service, and retailing division posted a decent top-line gain during the third quarter, aided by the closing of the OxyChem acquisition at the beginning of the year, as well as the Taylor Morrison deal in July, with margins returning to more normal levels.

The bottom line: With Berkshire’s third-quarter results coming in slightly above our expectations, we’re likely to modestly increase our current fair value estimate of $765,000 for Class A shares and $510 for Class B.

• Even if we make an upward adjustment to our valuation, we still view the company’s shares as modestly overvalued, trading at a 12% premium to our current fair value estimate.
• Book value per share, a decent proxy for measuring changes in Berkshire’s intrinsic value, increased 10.5% year over year to $536,590 from $485,429 at the end of September 2025.