Berkshire Hathaway (BRK.A) Q1 Earnings 2023

Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Earnings for Warren Buffett’s Berkshire Hathaway rose in the first quarter, thanks to a rebound in the conglomerate’s insurance business.

Operating income, which includes profits from the corporation’s wholly-owned businesses, totaled $8.065 billion in the first quarter. This was a 12.6% increase from $7.16 billion in the previous year.

Profits from insurance underwriting were $911 million, up sharply from $167 million a year earlier. Insurance investment income also rose 68% to $1.969 billion from $1.170 billion.

Geico saw a big turnaround in the quarter, returning to a huge underwriting profit of $703 million. The auto insurer was the victim $1.9 billion Last year’s pre-tax underwriting loss came as it lost market share to rival Progressive. Ajit Jain, Berkshire’s vice president of insurance operations, previously said telematics was the biggest culprit for Geico’s underperformance.

The company’s rail business, BNSF, saw year-over-year revenue declines, along with its energy company. Activities classified under “Other Controlled Businesses” and “Uncontrolled Businesses” have increased marginally over the previous year.

Berkshire’s cash hoard rose to $130.616 billion in the fourth quarter of 2022 from $128 billion. Berkshire repurchased $4.4 billion worth of shares – from the first quarter of 2021 – up from $2.8 billion at the end of last year.

Berkshire’s net income, which includes short-term investment gains, rose to $35.5 billion in the quarter from $5.6 billion in the same period a year ago, reflecting a first-quarter rebound in stock investments such as Warren Buffett’s Apple. Buffett cautions investors not to pay attention to quarterly fluctuations in unrealized returns on investments.

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The company’s latest quarterly results come ahead of its annual shareholder meeting, dubbed the “Woodstock for Capitalists.”

Berkshire Class A shares were up 4.9% this year through Friday’s close, lagging the S&P 500’s 7.7% advance. However, the stock is at an all-time low of 3%.

— CNBC’s Yun Li contributed reporting.

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