Berkshire Hathaway profit falls amid market losses
Warren Buffett’s Berkshire Hathaway on Saturday posted lower operating earnings in the first quarter, dented by insurance losses from wildfires and foreign currency transitions, while its cash stake rose to a record $347.7 billion.
Operating Profit Declines Despite Strong Insurance Performance
Berkshire Hathaway reported a 14% drop in operating profit for the quarter, falling to $9.64 billion, or about $6,703 per Class A share, from $11.22 billion a year earlier. Despite improvement in its core insurance business, the conglomerate’s performance was affected by mounting losses in other areas, particularly from wildfire-related claims and market volatility.
Net Income Slumps Due to Stock Losses, Especially Apple
The net income plummeted 64% to $4.6 billion, or $3,200 per Class A share, down from $12.7 billion a year ago. This sharp decline was largely due to unrealized losses on Berkshire’s stock holdings, with Apple being a significant contributor to the downturn.
Cash Reserves Swell Amid Limited Investment Opportunities
Berkshire’s cash holdings increased to $334.2 billion, indicating the company’s ongoing difficulty in finding attractive acquisition opportunities. The firm also did not repurchase any of its own stock for the third consecutive quarter, and it remained a net seller of stocks for the tenth straight quarter, purchasing $3.18 billion worth of equities while selling $4.68 billion.
Insurance Hit Hard by California Wildfires
Berkshire reported $1.1 billion in insurance losses due to the January wildfires near Los Angeles. These losses halved the net income from its insurance operations to $1.34 billion, even as Geico posted a 13% increase in pre-tax underwriting profits, thanks to higher premiums and fewer accident claims.
Currency Losses and Trade Policy Uncertainty Cloud Outlook
The conglomerate also absorbed $713 million in currency-related losses, reversing a gain of $597 million from the same period last year. Berkshire’s quarterly report noted ongoing uncertainty related to U.S. trade policy, stating it was “unable to reliably predict” the future impact of tariffs on supply chains, costs, and demand.
Looking Ahead to Annual Shareholder Meeting
The results were released ahead of Berkshire Hathaway’s highly anticipated annual shareholder meeting in Omaha, an event that draws tens of thousands of investors. Warren Buffett, now 94, continues to lead the company he has built over six decades into one of the world’s most diversified conglomerates, with holdings ranging from Geico and BNSF Railway to Dairy Queen and See’s Candies.