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

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

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

Berkshire said countless businesses 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, starting from the third quarter of 2020, many businesses witnessed significantly higher sales and profits compared to the second quarter, which reflects the high customer demand.

At the end of September, Berkshire’s cash volume reached a record high of $149.2 billion, up from $144.1 billion in the second quarter. Especially after the company stumbled on major acquisitions in the past few years that brought the valuations of the companies before it to record levels, and the deal-making environment turned into a very competitive situation.

The company’s cash boost came despite massive Berkshire Hathaway share buybacks. The company repurchased $7.6 billion of its stock in the third quarter, bringing the nine-month total to $20.2 billion. As well as stock purchases worth $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, down 60% year-on-year. Total return on equity investments was just $3.8 billion in the fourth quarter, compared to gains of $24.8 billion a year earlier.

In turn, the co-founder of Berkshire Hathaway, the famous billionaire, Warren Buffett stressed that investors should not focus too much on quarterly changes in their investment gains or losses.

The company’s Class B shares are up more than 24% this year, and remain less than 2% from their May highs.