Warren Buffett walks the floor before Berkshire Hathaway’s annual shareholders meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen CNBC
Berkshire Hathaway on Saturday reported a huge year-over-year increase in first-quarter operating profit, while its cash holdings rose to record levels.
The Warren Buffett-led group reported operating profits – which include profits from the company’s wholly-owned businesses – which rose 39% to $11.22 billion compared to the same period a year earlier.
This gain was driven by a 185% year-over-year increase in insurance underwriting profits to $2.598 billion from just $911 million. Geico’s profits swelled 174% to $1.928 billion from $703 million the previous year. Insurance investment income also swelled by 32%, reaching more than $2.5 billion.
Berkshire’s railroad business generated profits of $1.14 billion, down slightly from the first quarter of 2023. Its energy division saw profits nearly double to $717 million from $416 million a year earlier.
First-quarter net earnings, which include fluctuations from Berkshire stock investments, fell 64% to $12.7 billion. Buffett calls these unrealized investment gains (or losses) each quarter meaningless and misleading, but the unique group is required to report these numbers based on generally accepted accounting principles.
The company’s cash stock reached a record high of $188.99 billion, up from $167.6 billion in the fourth quarter. This massive holding, which far exceeds CFRA research estimates of more than $170 billion, indicates Buffett’s inability to find a suitable major acquisition target – something he has lamented in recent years.
Certainly, Berkshire reduced its stake in Apple by 13%. However, the iPhone maker remained Berkshire’s largest stockholder.
Berkshire also repurchased shares worth $2.6 billion, up from $2.2 billion in the fourth quarter of 2023.
The report comes ahead of the company’s annual shareholders meeting, known as the “Woodstock of capitalists.” Buffett will answer shareholders’ questions about everything from the group’s holdings as well as his thoughts on investing and the economy.
This will also be the first annual meeting since the death of Board Vice Chairman Charlie Munger in November.
Year-to-date, Berkshire Class A shares have risen more than 11%, reaching an all-time high in late February. Meanwhile, Class B stock has risen more than 12% in that time.
Check out CNBC’s full coverage of this year’s annual meeting here.
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