Berkshire Hathaway Posts Strong First-Quarter Operating Earnings of $7 Billion

In the first quarter, Berkshire Hathaway saw strong profits and repurchased $6.6 billion of its shares.

What Happened: On Saturday, Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B) reported close to $12 billion profit in the first quarter. The company said that it earned $11.7 billion, or $7,638 per Class A share, during the first quarter as the paper value of its investment portfolio rebounded, AP reports.  

Berkshire’s operating earnings improved to $7.018 billion, or $4,577.10 per Class A share. That’s up from $5.87 billion, or $3,617.62 per Class A share a year ago.

In the first quarter, the company bought back $6.6 billion of Berkshire shares, after a record $24.7 billion in buybacks last year. The company recorded $9 billion in share buybacks in its fourth quarter.

Last year, Warren Buffett’s company witnessed a major loss when the value of its stock investments plummeted due to the COVID-19 pandemic. Berkshire reported losing $49.7 billion, or $30,653 per share.

According to Buffett, Berkshire’s operating earnings offer a better view of quarterly performance because they exclude investments and derivatives.

“The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said in a statement.

Last year, Buffett disclosed at the annual meeting that the company had sold $6.5 billion of securities, including all of its airline stock holdings.

Berkshire Hathaway was one of the largest shareholders of several airlines, and had dramatically boosted its holdings in Delta Air Lines, Inc DAL after the coronavirus pandemic started. That fueled some speculation Buffett could step in again with major investments in one or more of the airlines, or possibly even buy one.

Coming Up: Later today, Buffett will address investors around the world at Berkshire Hathaway's 2021 Annual Shareholder Meeting. He is expected to spend hours answering questions from shareholders, and talking about Berkshire's business, the markets and the economy.

Buffett will be joined by Berkshire vice chairmen Charlie Munger, Greg Abel and Ajit Jain. Due to the COVID-19 pandemic, the company is holding its meeting online for the second year in a row.

Munger, Buffett's long-time business partner, will co-lead this year’s event. Last year, due to the pandemic, he was not available for the meeting.

Yahoo Finance will exclusively livestream the event starting at 12:30 p.m. EST.

Image credit: Fortune Live Media, Flickr

Posted In: Charlie MungerWarren BuffettNews

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