Berkshire's Rail and Energy Units Carry the Load as Underwriting Cools
Published on 11/08/2026 at 19:03 | Editorial boerse-global.de
Berkshire Hathaway bought back roughly $9.6 billion of its own stock in the third quarter of 2026, and the pace has not slowed since — Reuters reported the conglomerate picked up about $2 billion more in October. Add it up and repurchases across the first nine months of 2026 reached some $14.4 billion, with $4.8 billion of that spent before the third quarter even began.
The buybacks landed alongside a softer earnings picture. Net income attributable to shareholders came in at $22.1 billion for the quarter, down from $30.8 billion a year earlier. Operating profit told a milder version of the same story: $12.705 billion, a decline of 5.8% from the prior-year period, with weaker underwriting at the insurance operations doing most of the damage.
Insurance underwriting earnings fell to $1.35 billion from $2.37 billion. GEICO felt the pinch hardest, posting $982 million against $1.77 billion a year ago, while its loss ratio deteriorated to 91.4%. The auto insurer's claims ratio climbed to 76.6% from 71.5%, a move management pinned on more frequent and more expensive claims, compounded by lower average earned premiums per policy. Insurance operating expenses rose 17% over the same stretch.
Reinsurance offered a partial counterweight. Booked premiums in property and casualty reinsurance advanced 7.0% to $5.54 billion, helped in part by new policies including the arrangement with Tokio Marine.
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The non-insurance engine
What kept the quarter from looking worse was the breadth of the rest of the group. Under CEO Greg Abel, the operating resilience of the whole conglomerate is the number investors keep coming back to, and the subsidiaries outside insurance made the case for it. BNSF lifted profit 19%, Berkshire Hathaway Energy added 8%, and the manufacturing, services and retail businesses together grew earnings 12%. Precision Castparts chipped in too, with pre-tax profit up 30%.
The railroad's detail is worth a closer look. Shipping volume rose 3.9% and average revenue per unit jumped 10.5%, pushing the operating ratio down to 63.8% — evidence the railway ran more profitably even as costs climbed. Higher fuel expenses did weigh on the quarter, a reminder that the offset has limits of its own.
Those gains matter most as a cushion. If the insurance side steadies while rail, energy and the industrial units keep expanding, a larger share of their progress flows through to group operating profit. A recovery carried by several businesses would be a more convincing signal than one resting on a single subsidiary.
What to watch next
The first regular trading reaction to yesterday's release comes at the U.S. session on Monday, 9 November 2026. A portfolio filing is expected the following week, which could shed light on how Berkshire is positioning its equity holdings under Abel.
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Market chatter around the stock has also pointed to investors hunting for a safe harbor amid the selloff in AI shares — context Reuters noted alongside the buybacks and the numbers, not a confirmed sole driver of the move.
For the bulls, the argument rests on the breadth of the growing businesses and their ability to lift group operating profit again. The cautionary case is straightforward: if claims pressure at GEICO persists and costs keep biting at BNSF, those advances get eaten up, and the buybacks will only look as solid as the earnings base beneath them.
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