Berkshire Hathaway’s insurance boosts first-quarter profit and cash to nearly $200 billion | Wilnesh News

Berkshire Hathaway shares rose on Monday after Warren Buffett’s conglomerate reported a surge in operating profit and a record cash hoard.

company’s Class A shares It was up 0.3% in early trading. at the same time, Class B Shares last traded up about 0.4%.

The moves came after Berkshire reported first-quarter operating profit of $11.22 billion, a 39% year-over-year increase, driven primarily by growth in insurance underwriting earnings. Operating profit measures earnings from all of Berkshire’s operations.

The strength of the insurance business, particularly its crown jewel Geico, comes as the industry as a whole benefits from strong demand and increased pricing power. Insurance underwriting revenue rose to US$2.598 billion, an increase of 185% from US$911 million in the same period last year. Geico’s profits rose 174% to $1.928 billion from $703 million a year ago.

Berkshire’s cash pile has surged to record levels, in part because the holding company has failed to find suitable acquisition targets in recent years. Cash surged to a record $188.99 billion in the first quarter, up from $167.6 billion in the fourth quarter.

“Our insurance underwriting earnings are substantially higher. And then our investment income is almost certainly going to be higher,” Buffett said Saturday at the group’s annual shareholder meeting in Omaha, Nebraska. “I said this in the annual report “Because yields are much higher than last year and we have a lot of fixed short-term investments, they are very sensitive to changes in interest rates.”

Berkshire Hathaway’s stock has outperformed the market this year, with every share class up more than 10%. The S&P 500 is up more than 7% this year.

Class A shares hit an all-time closing high this year, reaching $634,440 in March; they closed at $603,000 on Friday. Shares of Class B shares last traded around $402.60 a share on Monday, about 4% below the record closing price of $420.52 set in March.

But Wall Street analysts remain optimistic about the company’s prospects. UBS analyst Brian Meredith gave Berkshire a buy rating, citing an earnings beat and noting that Geico is on track to catch rivals Progressive and others by 2025 Data analytics company.

On the other hand, Edward Jones analyst James Shanahan gave Berkshire Hathaway a hold rating, saying the current stock price is quite reasonable. However, he said he still “expected significant earnings from BRK’s diversified group of operating companies.”