A company with liquidity close to $ 150 billion is facing a huge problem

Berkshire Hathaway’s operating profit continued to grow thanks to the continued recovery of the rail, utilities and energy sectors from the effects of the Corona pandemic, leaving liquidity record for the company, as it suffers from the lack of investment opportunities to employ those funds.

The group reported operating income of $ 6.47 billion in the third quarter, in growth of 18% from $ 5.48 billion in the same quarter last year.

Berkshire said countless companies benefited from the economic reopening as demand began to return to pre-pandemic levels as operating profit from the rail, utilities and energy sectors grew 11% year-on-year to $ 3.03 billion in the third quarter.

The business results report added that, as of the third quarter of 2020, many companies had significantly higher sales and profits than in the second quarter, reflecting high customer demand.

At the end of September, Berkshire’s cash volume reached record of 149.2 billion dollars, in increase from $ 144.1 billion in the second quarter. Especially after the company stumbled upon in major acquisitions in recent years that have brought the valuations of companies before her to levels record and the trading environment has transformed in a very competitive situation.

The company’s liquidity surge came despite massive buybacks of Berkshire Hathaway stock. The company repurchased $ 7.6 billion of shares in the third quarter, bringing the nine-month total to $ 20.2 billion. As well as stock purchases of $ 24.7 billion last year.

On the other hand, overall earnings, which reflect Berkshire’s volatile equity investment, fell to $ 10.3 billion in the third quarter, in 60% drop on an annual basis. Total return on equity investments was only $ 3.8 billion in the fourth quarter, compared with earnings of $ 24.8 billion a year earlier.

In turn, Berkshire Hathaway co-founder Warren Buffett stressed that investors shouldn’t focus too much on quarterly changes in their investment gains or losses.

The company’s Class B shares have risen by more than 24% questyear and remain less than 2% from the highs of May.

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