Berkshire Hathaway (BRK.A) earnings for the first quarter of 2023
Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. 1 May 2021.
Gerard Miller | CNBC
Earnings for Warren Buffett’s Berkshire Hathaway increased in the first quarter, thanks in part to an uptick in the conglomerate̵[ads1]7;s insurance business.
Operating income, which includes profits from the conglomerate’s wholly-owned businesses, amounted to $8.065 billion in the first quarter. That’s up 12.6% from $7.16 billion the year before.
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The profit from insurance insurance came in at 911 million dollars, a sharp rise from 167 million dollars the previous year. Insurance investment income also rose 68% to $1.969 billion from $1.170 billion.
Geico saw a big turnaround in the quarter, returning to a big underwriting profit of $703 million. The auto insurer suffered a pretax underwriting loss of $1.9 billion last year as it lost market share to rival Progressive. Ajit Jain, Berkshire’s vice president of insurance operations, previously said the biggest culprit for Geico’s underperformance was telematics.
The company’s rail operations, BNSF, along with the energy company, saw earnings decline year-on-year. The business classified under “other controlled businesses” and “non-controlled businesses” had a slight increase from the same period last year.
Berkshire’s cash holdings swelled to $130.616 billion from $128 billion in the fourth quarter of 2022. Berkshire also bought back $4.4 billion of stock — the most since the first quarter of 2021 — up from $2.8 billion at the end of last year.
Berkshire’s net income, which includes short-term investment gains, rose to $35.5 billion in the quarter from $5.6 billion in the same period a year ago, reflecting a first-quarter comeback in Warren Buffett’s stock investments, such as Apple. Although Buffett warns investors not to pay attention to quarterly fluctuations in unrealized gains on investments.
The company’s latest quarterly results come ahead of the conglomerate’s annual shareholder meeting, an event known as “Woodstock for Capitalists”.
Berkshire Class A shares are up 4.9% this year through Friday’s close, trailing the S&P 500’s 7.7% gain. However, the stock is less than 3% below an all-time high.
— CNBC’s Yun Li contributed reporting.
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