(Omaha) Berkshire Hathaway’s first-quarter profit fell more than 53% due to sharp fluctuations in the value of its investments, but its chairman and CEO, Warren Buffett, found ways to put part of the company’s huge cash pile. Stakeholders are something to talk about at the annual meeting on Saturday.
Released at 12:10 p.m.
Berkshire Hathaway reported $ 5.46 billion for the quarter, or $ 3,702 for a Class A share. It was $ 11.7 billion a year ago or $ 7.638 per Class A share.
The key change for the quarter was that Berkshire’s cash shrank from $ 147 billion to $ 106 billion at the beginning of the year, investing $ 51 billion in stocks. Mr. Buffett spent $ 3.2 billion to repurchase Berkshire shares.
In the first quarter, Warren Buffett agreed to buy insurance company Alleghany for $ 11.6 billion and invested billions of dollars in HP, a multinational IT company, and Occidental Petroleum, a US company involved in hydrocarbon research. However, he has not yet released all of his share purchases, so it is not clear now where Berkshire has invested this year.
However, the share of Berkshire oil company Chevron rose from $ 4.5 billion at the beginning of the year to $ 26 billion at the end of the quarter. According to Jim Shanahan, Edward Jones financial services analyst, Berkshire now has more than $ 40 billion in investments in the oil sector, with joint ventures between Chevron and Occidental.
Berkshire, however, saw its investment value fall by $ 1.58 billion in the first quarter, compared to $ 4.7 billion a year earlier. This made a huge difference in net profit.
Mr Buffett says Berkshire’s operating profit is the best measure of a company’s performance, excluding investment gains and losses. By this measure, Berkshire’s earnings were $ 7.04 billion a year ago or $ 4,773.84 per Class A share, up from $ 7.018 billion or $ 4,577.10 a class a year ago.
It exceeded Wall Street expectations. Four analysts who voted for FactSet expected Berkshire to post an operating profit of $ 4,277.66 per Class A share.
Berkshire said on Saturday that profits had improved in most of its businesses, including railways, utilities and manufacturing, but that investment returns on its oil companies had fallen.
In addition to investments, Berkshire Hathaway owns more than 90 businesses, including BNSF Railways, a number of major utilities, Geico Insurance and a line of manufacturing and retail businesses. Tens of thousands of shareholders gathered in a hall in Omaha, not far from the company’s headquarters, on Saturday to meet Berkshire vice presidents and Mr. Buffett answered all questions for hours.