Berkshire Hathaway Inc. investors perked up Monday, after Warren Buffett’s investment arm disclosed a big jump in third-quarter profit and said it bought back some of its shares for the first time in six years.
The Class B shares BRK.B, +4.68% shot up 5.1% in afternoon trade toward a sixth straight gain, and enough to pace the gains among its financial peers, while the Class A BRK.A, +5.11% shares gained 5.6%. Considering how well the stock has performed since the last time the company repurchased shares, it’s no wonder when Buffett bets on himself, investors listen.
The company reported over the weekend net income for the quarter to Sept. 30 that more than quadrupled to $18.54 billion from $4.07 billion. Since Berkshire Hathaway adopted new accounting standards, earnings in the latest quarter include $11.4 billion in unrealized gains and losses resulting from changes in the fair values of its equity investments, while results prior to January 2018 recorded unrealized gains and losses in other comprehensive income.
Berkshire stressed that investors shouldn’t pay too much attention to $11.4 billion in investment gains, and only reported them that way because they are now required to do so:
“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be misleading to investors who have little or no knowledge of accounting rules.”
Perhaps what is of value to investors, Berkshire Hathaway disclosed in its 10-Q quarterly filing with the Securities and Exchange Commission that it repurchased about $928 million worth of its Class A and Class B shares during the quarter, something it hasn’t done since December 2012. The disclosure comes after the company changed its share