Berkshire Hathaway posted a record quarterly profit on Saturday, boosted by strength in its insurance operations, and appears to have sold a significant number of Apple shares as its cash stake swelled to $189 billion.
The company also reported first-quarter operating earnings of $11.2 billion, versus $8.07 billion for the same period a year earlier.
Buffett, 93, in February decried a lack of meaningful deals that he said would give the firm a shot at “eye-popping performance.” Even as the company ramped up acquisitions in recent years, including an $11.6 billion deal to buy Alleghany Corp. and its purchase of shares in Occidental Petroleum Corp., Berkshire has struggled to find sizable deals. That’s left Buffett with more cash than he and his investing deputies could quickly deploy.
In the absence of deals, Berkshire has resorted to buying back its own shares, spending about $2.6 billion in the first quarter, it said in its earnings statement Saturday.
Berkshire’s earnings rose despite Buffett’s warning in May last year that profits at most of its operations would fall in 2023 as an “incredible period” for the US economy draws to an end.
With businesses including railroad, retail, construction and energy, Berkshire is closely watched as a litmus test for US economic health, particularly amid elevated inflation and interest rates.
Earnings at its collection of insurance businesses jumped to $2.6 billion, versus $911 million in the same period last year, thanks to improved results at its auto insurer Geico, fewer catastrophes and an increase in insurance investment income. Berkshire posted financial results ahead of its annual meeting in Omaha, which is expected to draw thousands of Buffett devotees. It’s the first without Charlie Munger, Berkshire’s vice chairman and Buffett’s long-time investing partner, who died at 99 in late November.