Warren Buffett’s Company Reports $35.5 Billion Profit, Sold $13 Billion in Stocks

Berkshire Hathaway, owned by Warren Buffett, reported a profit of $35.5 billion for the first quarter on Saturday, reflecting gains from stocks such as Apple, while higher investment income and a recovery from auto insurer Geico bolstered business results, Reuters reported.

Berkshire also accelerated its share buybacks, repurchasing $4.4 billion, while reducing its investments in other stocks such as Chevron, which remains a significant holding.

The results were released ahead of Berkshire’s annual shareholder meeting in Omaha, part of a weekend that attracts tens of thousands of people to the city. Notably, Buffett, who is currently 92 years old, has led Berkshire since 1965, transforming it from a struggling textile company into a conglomerate with dozens of businesses including Geico, BNSF, Berkshire Hathaway Energy, and manufacturing and retail units including See’s Candies and the famous American ice cream Dairy Queen.

Diversification has led many investors, not just Buffett fans, to view Berkshire as a stable long-term investment even amid recession fears and concerns for the banking industry.

Net income was $24,377 per Class A share, up from $5.58 billion, or $3,784 per share, a year earlier. This partially reflected a 27 percent jump in Apple’s stock price, leaving Berkshire with $151 billion in shares of the iPhone maker.

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Accounting rules require Berkshire to report unrealized gains and losses with net results, and Buffett encourages investors to ignore the resulting volatility. Quarterly operating profit rose 13 percent to $8.07 billion, or about $5,561 per Class A share, from $7.16 billion.

These results were aided by Geico breaking a streak of six quarters of underwriting losses and a 68 percent increase in how much Berkshire’s insurance units generate from investments. Geico’s pre-tax underwriting profit was $703 million, thanks to higher premiums, fewer claims, and a significant drop in advertising spending, which may have led to fewer high-risk drivers seeking coverage.

Berkshire’s wealth increased by $2 billion in the quarter to $130.6 billion, as the company sold stocks worth $13.3 billion and bought only $2.9 billion. Chevron appeared to be among the sellers, with Berkshire’s stake falling 28 percent to $21.6 billion even though the oil company’s stock price dropped by only nine percent.

Berkshire also owns a 23.6 percent stake in another oil company, Occidental Petroleum. Its stock sales more than offset the $8.2 billion that Berkshire spent to increase its stake in the truck stop operator Pilot Travel Centers to 80 percent from 38.6 percent, leaving the founding Haslam family with 20 percent. The increase was expected.

BNSF railroad’s profit fell nine percent to $1.25 billion, impacted by higher fuel costs and lower shipping volumes. Berkshire Hathaway Energy, otherwise a stable earnings generator, reported a 46 percent drop in profit as it set aside $359 million in 2020 for legal and other costs related to fires in Oregon and Northern California, where it has more operations.

Business results also reflect the October purchase of insurance holding Alleghany Corp, while net results include gains related to Pilot. Berkshire’s Class A shares have risen 4.9 percent this year, lagging behind a 7.7 percent increase for the Standard & Poor’s 500’s SPX. The index lagged Berkshire by 23.4 percentage points in 2022, excluding dividends.