(Omaha) Berkshire Hathaway’s first-quarter profits fell more than 53% due to a sharp swing in the value of its investments, but its chairman and chief executive Warren Buffett found ways to put a part of the company’s massive cash pile, which will give shareholders something to talk about at Saturday’s annual meeting.
Posted at 12:10 p.m.
Berkshire Hathaway said it earned $5.46 billion, or $3.702 per Class A share, during the quarter. That’s down from $11.7 billion, or $7.638 per Class A share, a year ago.
The main change in the quarter was that Berkshire’s cash mountain shrank to $106 billion from $147 billion at the start of the year, when it invested $51 billion in stocks. Mr. Buffett also spent $3.2 billion to buy back shares of Berkshire.
During the first quarter, Warren Buffett agreed to buy insurance conglomerate Alleghany for $11.6 billion and he made multibillion-dollar investments in multinational information technology company HP and the American company engaged in hydrocarbon exploration, Occidental Petroleum. However, he has yet to disclose all of his stock purchases, so it is unclear at this time where Berkshire has also invested this year.
However, Berkshire said its stake in oil giant Chevron reached $26 billion at the end of the quarter, from $4.5 billion at the start of the year. Edward Jones financial services analyst Jim Shanahan said that with Chevron and Occidental’s combined investments, Berkshire now has more than $40 billion invested in the oil sector.
Berkshire, however, said the value of its investments fell by $1.58 billion in the first quarter while a year ago the estimate of its investments had increased by $4.7 billion. This accounted for most of the change in net profit.
Mr Buffett says Berkshire’s operating profits are a better measure of the company’s performance because they exclude investment gains and losses. By this measure, Berkshire’s earnings were flat at $7.04 billion, or $4,773.84 per Class A share, from $7.018 billion, or $4,577.10 per Class A share, a year ago. a year.
This exceeded Wall Street expectations. The four analysts polled by FactSet expected Berkshire to report operating profit of $4,277.66 per Class A share.
Berkshire said on Saturday that profits improved at most of its businesses, including the railroads, utilities and manufacturing businesses it owns, but investment income fell at its oil companies. assurance.
In addition to investments, Berkshire Hathaway owns more than 90 businesses, including BNSF Railway, several major utilities, Geico Insurance, and an array of manufacturing and retail businesses. Tens of thousands of shareholders gathered in a hall in Omaha not far from the company’s headquarters on Saturday to listen to Berkshire vice-chairmen and Mr. Buffet spend hours answering all the questions.