Berkshire Hathaway said on Saturday first-quarter earnings increased sixfold, fueled by a huge paper return on investments as the Warren E. Buffett-led conglomerate held its annual shareholder meeting in its hometown of Omaha. Reported.
Berkshire has a vast business that includes insurance, railroads, utilities and consumer goods. said he earned $35.5 billion in the first three months of the year, up from nearly $5.6 billion in the same period last year.
Because of its breadth of operations, Buffett’s firm is often considered synonymous with the American economy, and its performance has driven some of the major current trends, including the war in Ukraine, rising and falling interest rates and fuel prices. It reflects. Off consumer spending.
Empowering Berkshire Soaring revenue The company had $31.1 billion in unrealized gains on investments made using large amounts of cash raised from its insurance operations. This far outstripped the S&P 500 stock index’s nearly 7% gain during the quarter.
As usual, however, the company cautioned that it believes any paper gain or loss on its investments is “meaningless” in understanding its underlying financial health. In the company’s preferred operating income metric, which excludes many of those investment gains, Berkshire earned $8.07 billion in the fourth quarter, up 12% from a year earlier.
Other core parts of Berkshire’s machine reported more mixed results.
The company’s insurance business reported net underwriting income of $911 million. This was especially supported by his Geico division, which benefited from higher premiums and lower claims. It also cut spending on high-profile advertising campaigns.
Berkshire’s giant BNSF railroad, one of the nation’s largest freight networks, revealed a slight drop in net profit to $1.2 billion. According to the company, the business benefited from higher fuel surcharges and he increased the price per vehicle, but was hit by higher fuel costs and lower shipments.
The company’s energy and power business division reported a significant decline in net income. This was because higher operating costs offset higher revenue and customer usage.
Other businesses that underperformed in the quarter include homebuilder Clayton Homes, a building products group struggling with a slowdown in the housing market due to rising interest rates, and consumer products like Forest River Line. company was included. Camper and Fruit of the Loom underwear. Berkshire said the decline in apparel revenue was driven by lower volumes as orders continued to be delayed and canceled in response to rising inventory levels among retailer customers.
During the quarter, Berkshire continued a series of share buybacks, repurchasing $4.4 billion of its own shares. Buffett is increasingly relying on financial strategies to bolster the company’s performance and use some of his cash on hand to cover shortfalls from his signature high-priced acquisitions. .
Berkshire said it has doubled its stake in Pilot, which operates a chain of truck stops, to 80%. He also sold $13.3 billion of his stake during the same period.
Saturday’s results were announced as tens of thousands of Berkshire shareholders flocked to Omaha to attend the company’s 59th Annual Shareholders Meeting, primarily to hear directly from Mr. Buffett. Long known as “Woodstock for Capitalists,” at his one-hour event, Mr. Buffett and his longtime lieutenant Charlie Munger will answer questions on a wide range of topics.
This year’s shareholders’ meeting is expected to hold special weight for many shareholders. Given the ages of Berkshire’s executives (Buffett will be 93 this summer and Munger will be 99), it’s unclear how many more meetings the two will chair.
Buffett, however, has a succession plan for his empire. His son Howard will become non-executive chairman, while vice chairman Gregory Abel, who oversees many of Berkshire’s non-insurance businesses, will become CEO. Todd Combs and Ted Weschler, who have overseen portions of Berkshire’s investment portfolio for years, will oversee all of it.
