Berkshire Hathaway Inc, the multinational conglomerate led by Warren Buffett, has reported a staggering $35.5 billion in profit for the first quarter of 2023. The impressive financial performance can be attributed to gains from common stocks, such as Apple Inc, and higher income from investments, which significantly bolstered operating profit.
The company’s net income surged to $24,377 per Class A share, a substantial increase from the $5.58 billion or $3,784 per share reported a year earlier. Quarterly operating profit also experienced a 13% growth, rising to $8.07 billion or approximately $5,561 per Class A share from $7.16 billion.
During the quarter, Berkshire Hathaway repurchased $4.4 billion of its own stock, reflecting the company’s confidence in its long-term value. The Omaha, Nebraska-based conglomerate has a succession plan in place, with Vice Chairman Greg Abel set to succeed Buffett as CEO.
Berkshire Hathaway’s insurance unit, comprising Geico and several large reinsurers, recorded a $911 million operating profit, a significant increase from last year’s $167 million. Geico benefited from higher premiums, reduced advertising spending, and fewer claims. On the other hand, Berkshire’s BNSF railroad and utility division reported lower profits. BNSF earned $1.25 billion, down from $1.37 billion, due to a 10% drop in shipments after losing a major customer and import slowdowns at West Coast ports. The utility division’s earnings fell to $416 million, compared to $775 million last year.
Apart from these major businesses, Berkshire Hathaway owns a diverse range of retail and manufacturing firms, such as See’s Candy and Precision Castparts. Despite concerns about a potential recession, the conglomerate’s eclectic mix of companies has demonstrated resilience and strong performance.
Berkshire Hathaway is currently facing pressure from activist investors who are urging the company to produce a comprehensive report on its climate change risks. However, shareholders are expected to dismiss these proposals, as both Buffett and the board oppose them, with Buffett controlling over 30% of the vote.
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