Warren Buffett takes the stage before Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | David A. Grogen CNBC
Berkshire Hathaway It reported on Saturday that first-quarter operating profit jumped year-on-year, while its cash holdings soared to a record.
The conglomerate led by Warren Buffett reported operating profit, which includes revenue from the company’s wholly owned businesses, soaring 39% from a year earlier to $11.22 billion.
This growth was driven by an 185% annual increase in insurance underwriting revenue, from US$911 million to US$2.598 billion. Geico’s profits rose 174% to $1.928 billion from $703 million a year ago. Insurance investment income also grew 32% to more than $2.5 billion.
Berkshire’s rail operations posted profit of $1.14 billion, down slightly from the first quarter of 2023.
First-quarter net income, which includes fluctuations in Berkshire stock investments, fell 64% to $12.7 billion. Buffett calls these quarterly unrealized investment gains (or losses) meaningless and misleading, but the unique conglomerate is required to report these numbers in accordance with generally accepted accounting principles.
Record cash reserves
The company’s cash reserves hit a record $188.99 billion, up from $167.6 billion in the fourth quarter.The massive holding, well above CFRA Research’s estimate of more than $170 billion, suggests Buffett’s inability to find suitable major acquisition targets — something that he has lamented in recent years.
To be sure, Berkshire did cut its Apple stake by 13%. Still, the iPhone maker remains Berkshire’s largest holding.
Berkshire also repurchased $2.6 billion in stock, up from $2.2 billion in the fourth quarter of 2023.
The report was released ahead of the company’s annual shareholder meeting, known as “capitalist Woodstock.” Buffett will answer a variety of questions from shareholders, including the group’s holdings and his views on investing and the economy.
It will also be the first annual meeting since the death of Vice Chairman Charlie Monger last November.
Berkshire Hathaway’s A shares have risen more than 11% so far this year and reached an all-time high in late February. Meanwhile, Class B shares have gained more than 12% over the same period.
Check out CNBC’s full coverage of this year’s annual meeting here.
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