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Buffett’s Berkshire Hathaway posts record operating profit, net income declines
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Berkshire Hathaway’s operating profit during the first quarter jumped 39% to $11.2 billion, or about $7,807 per Class A share, compared to $8.07 billion for the same period a year ago.
Warren Buffett-led Berkshire Hathaway announced its 2024 first quarter earnings on Saturday. The company registered a record quarterly profit, mainly on the back of a significant increase in income from insurance underwriting.
Berkshire Hathaway‘s operating profit during the first quarter jumped 39% to $11.2 billion, or about $7,807 per Class A share, compared to $8.07 billion for the same period a year ago.
The company saw a 64% drop in net income due to significantly reduced unrealized gains from its common stock holdings, mainly stemming from Apple’s declining share price. Additionally, the company repurchased $2.6 billion worth of its own stock.
“Approximately $2.6 billion was used to purchase shares of Class A and Class B common stock during the first quarter of 2024,” according to an earnings statement released by Berkshire Hathaway.
Its net income tumbled to $12.7 billion, or $8,838 per share, from $35.5 billion. An accounting rule requires Berkshire to report unrealized gains and losses with net results, and Buffett urges investors to ignore the resulting volatility.
Buffett considers net results misleading because they include gains and losses on investments that Berkshire has not sold.
Berkshire Hathaway’s insurance segments saw $2.6 billion in underwriting profits, a remarkable increase from last year’s $911 million.
The earnings announcement was made ahead of Berkshire’s annual shareholder meeting in Omaha, part of a weekend that draws tens of thousands of people to the city.
Buffett famously releases his quarterly report over the weekend so that investors have time to fully digest its contents before trading opens again on Monday.
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