By Jonathan Stempel
OMAHA, Nebraska, May 2 (Reuters) – Berkshire Hathaway on Saturday reported a higher first-quarter operating profit even as economic uncertainty weighed on several of its consumer-oriented businesses.
The Omaha, Nebraska-based conglomerate built by Warren Buffett and now led by Greg Abel also reported a record cash level, reflecting difficulty finding investments that meet its value-oriented principles.
Profit from Berkshire’s dozens of businesses rose 18% to $11.35 billion, or about $7,891 per Class A share, from $9.64 billion a year earlier.
Net income, including from common stock investments, more than doubled to $10.1 billion, or $7,027 per Class A share, from $4.6 billion.
The company downplays the significance of net income, which because of accounting rules includes unrealized gains and losses on stocks it has no plans to sell.
Berkshire said it repurchased $234 million of its own stock in the quarter, its first buybacks since May 2024. It conducted no repurchases in the first two weeks of April.
Cash totaled $380.2 billion at the end of March, excluding purchases of U.S. Treasury bills that had yet to settle by March 31. The cash pile reflected the company’s years-long inability to find a major acquisition, as well as sales of some of its largest stock holdings led by Apple.
Berkshire sold $8.1 billion more stocks than it bought in the first quarter, the 14th straight quarter it was a net seller of stocks. It paid $9.5 billion in January for Occidental Petroleum’s chemicals business.
BERKSHIRE SEES GREATER ECONOMIC UNCERTAINTY
Berkshire owns dozens of businesses including Geico, the BNSF railroad, Berkshire Hathaway Energy, Dairy Queen and See’s Candies.
While Berkshire is sometimes considered a microcosm of the broader U.S. economy, its focus on insurance and hard assets has left it out of step with broader market trends, including excitement with artificial intelligence.
Worries about the economy took a toll on several of Berkshire’s consumer-oriented businesses.
Berkshire said economic conditions weighed on building products businesses such as the Clayton Homes mobile home unit, while the Forest River RV unit, Fruit of the Loom and Squishmallows maker Jazwares reported lower revenue amid “higher economic uncertainty” and lower consumer confidence.
The quarter was the first under Abel, who succeeded Buffett in January as Berkshire’s chief executive. Buffett remains chairman.
Results were released prior to Berkshire’s annual shareholder meeting, which draws tens of thousands of people to Omaha.
Berkshire shares have significantly lagged the broader market since Buffett unexpectedly announced at last year’s meeting when Abel would take over.
In 2026, Berkshire Class A shares have fallen 6%, while the Standard & Poor’s 500 is up 6%.
GEICO UNDERWRITING PROFIT FALLS
Profit from insurance operations rose 4% to $4.4 billion from a year earlier, when wildfires in Southern California hurt results in reinsurance and smaller insurance businesses.
The overall improvement came despite a 35% drop in pre-tax underwriting profit at auto insurer Geico, where accident claims and marketing expenses increased.
Geico spent several years upgrading its underwriting discipline and technology, and is trying to reclaim market share it gave up to rivals such as Progressive.
Abel said at the meeting that the insurance sector generally is “softening” and becoming “more challenging” as more capital flows into the market, making it harder for Berkshire to charge sufficient premiums for the risks it takes on.
BNSF said profit rose 13% to $1.38 billion, helped by higher demand to ship grains, petroleum fuels, oilseeds and meals.
The railroad has lagged some peers in operating margin, and Abel said in his first annual letter to Berkshire shareholders that improved efficiency and service were necessary.
Berkshire Hathaway Energy said profit rose 2%, as higher revenue from natural gas pipelines attributable to cold weather offset rising maintenance and wildfire prevention costs in utility businesses.
Profit from manufacturing, service and retail operations rose 5% to $3.2 billion.
(Reporting by Jonathan Stempel in Omaha, Nebraska, editing by Colin Barr and Keith Weir)
Comments