Berkshire Hathaway on Saturday reported lower first-quarter profits due primarily to lower investment income, as the conglomerate's CEO Warren E. Buffett prepares to speak at its annual investor conference. reported a significant decrease.
These results support the increase in operating income, which represents the actual profits generated by Berkshire's family of companies, as well as the increase in Berkshire's formidable cash reserves (totaling approximately $189 billion as of March 31st), which indicates the company's solid health.
The company's latest financial results, the backdrop for a meeting in downtown Omaha, are Berkshire's first since Charles Munger, Buffett's longtime business partner and alter ego, died in November at age 99. It will be a meeting.
Berkshire reported $12.7 billion in profit attributable to shareholders for the first three months of this year, down 64% from a year earlier. The decline was driven by a sharp decline in the paper value of Berkshire's vast investment portfolio, but Buffett has long warned shareholders to ignore fluctuations in the company's holdings.
Berkshire also said it reduced Buffett's huge stake in Apple, one of the company's most important holdings, by about 13% in the quarter. Apple currently owns approximately $135.4 billion in assets, down from $174.3 billion at the end of 2023 (Apple CEO Tim Cook is attending the annual meeting).
Looking at operating profit, Mr. Buffett's favorite metric for gauging the specific health of Berkshire's business, the company reported a 40% increase to $11.2 billion. This was as Berkshire's core underwriting business more than doubled, as its insurance company Geico reported higher premiums per policy and claims fell. The company's reinsurance division was not hit by any major catastrophes in the first quarter of this year.
These gains offset weaker performance in other parts of Buffett's empire, including an 8% decline in BNSF Railway's net income due to lower fuel shipments relative to consumer goods and lower fuel surcharge revenue. Ta.
Pilot Travel Centers, the truck stop chain the company took full control of in January, reported a 19% drop in net income due to lower fuel sales margins and higher operating expenses.
And Berkshire revealed that its Western utility company, PacifiCorp, is facing federal and state investigations and lawsuits over its role in the 2020 and 2022 wildfires.
The earnings report will be released ahead of Berkshire's general meeting, where tens of thousands of Berkshire shareholders are expected to gather at the company's local CHI Health Center Arena to watch Mr. Buffett answer questions.
Among the topics he will likely discuss, with the help of top executives including his likely successor Gregory Abel, are the prospects for the economy, the November election and where he will invest. Examples include whether they see opportunities.
