Berkshire Hathaway, the diversified conglomerate, has reported a robust first-quarter operating profit, even as several of its consumer-oriented businesses contended with economic uncertainty. The company operates dozens of businesses across sectors including insurance, rail transport, energy, and consumer goods. Based in Omaha, Nebraska, and known for its value-oriented investment principles and wide range of holdings, it is now led by Greg Abel, with Warren Buffett continuing as chairman. This quarter marks the first under Abel as chief executive.
Profit from Berkshire’s extensive portfolio of businesses climbed 18% to $11.35 billion, or approximately $7,891 per Class A share, up from $9.64 billion a year prior. Net income, including common stock investments, more than doubled to $10.1 billion. The company, however, typically downplays net income’s significance, as accounting rules include unrealised gains and losses on stocks not intended for sale. Reflecting challenges in identifying major acquisitions, Berkshire’s cash levels hit a record $380.2 billion at March’s end, partly due to sales of large stock holdings, including Apple, marking its 14th consecutive quarter as a net stock seller. The company also repurchased $234 million of its own stock.
Economic conditions notably impacted several of Berkshire’s consumer-focused divisions. Businesses like Clayton Homes, Forest River RV, Fruit of the Loom, and Jazwares reported lower revenue due to “higher economic uncertainty” and diminished consumer confidence. Conversely, insurance operations saw a 4% profit increase to $4.4 billion, despite a 35% drop in pre-tax underwriting profit at auto insurer Geico. BNSF railroad’s profit rose 13% to $1.38 billion, aided by increased demand for shipping grains and petroleum fuels. Berkshire Hathaway Energy’s profit also increased 2% on strong natural gas pipeline revenue.
