Berkshire Hathaway's Q1 Operating Earnings Surged 39% — Here's Why

Zinger Key Points
  • Berkshire Hathaway's Q1 operating earnings soar 39% to $11.22 billion, boosted by robust insurance and investment income.
  • Net earnings drop to $12.702 billion from $35.504 billion due to investment losses, but insurance underwriting and investment income rise.

Berkshire Hathaway Inc. BRK BRK, on Saturday, registered a solid increase in first-quarter operating earnings, driven by strength in its insurance businesses, both in underwriting and investment income.

The Omaha-based company's quarterly operating earnings of $11.22 billion rose over 39% from $8.065 billion in the year-ago quarter.

At the end of the quarter, the company said approximately 75% of the aggregate fair value was concentrated in five companies:

  • American Express Company AXP – $34.5 billion
  • Apple Inc. AAPL – $135.4 billion
  • Bank Of America Corporation BAC – $39.2 billion
  • Coca-Cola Company KO: – $24.5 billion
  • Chevron Corporation CVX – $19.4 billion

The company’s cash and equivalents as of March end stands at $28.891 billion,

Q1 Net Earnings In Detail: In the first quarter of 2024, investment losses totaled approximately $9.7 billion, while gains amounted to around $23.4 billion in the same period of 2023. 

These gains and losses were primarily due to changes in unrealized gains in equity security investments. 

Additionally, after-tax realized gains from investment sales were $11.2 billion in the quarter under review, compared with $1.7 billion in the year-ago period. 

Net earnings attributable to Berkshire shareholders decreased to $12.702 billion from $35.504 billion a year ago.

Segmental Analysis: In the quarter under review, insurance underwriting generated earnings of $2.59 billion versus $911 million year over year.

Earnings from insurance-investment income totaled $2.598 billion compared with $1.969 billion in the year-ago period.

Berkshire Hathaway Energy Company generated first quarter earnings of $717 million, higher than $416 million a year ago.

Other controlled businesses earnings in the first quarter totaled $3.088 billion, which is higher than the $3.065 billion in the first quarter of 2023.

Approximately $2.6 billion was used to purchase shares of Class A and Class B common stock during the first quarter of 2024.

Approximately $2.6 billion was used to purchase shares of Class A and Class B common stock during the first quarter of 2024. 

On March 31, there were 1,437,251 Class A equivalent shares outstanding. The insurance float (the net liabilities we assume under insurance contracts) was approximately $168 billion.

Warren Buffett, 93, is one of the best-known fundamental investors in the world. Known as the “Oracle of Omaha,” he has a real-time net worth is $131.7 billion. 

Price Action: BRK/B shares closed higher by 0.07% to $400.87 on Friday; shares were up by 0.26% after hours.

Read Next: Warren Buffett’s Annual Secret Berkshire Hathaway Movie To Be Shown Publicly For First Time: Could This Be The Ultimate Tribute To Charlie Munger?

Photo: Shutterstock

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