Berkshire Hathaway (BRK.A) (NYSE:BRK.B) Q1 operating profit increased slightly over a year before when the manufacturing and retail businesses thrived but underwriting revenues declined. The company, which owns Geico, Precision Castparts and furniture stores, found an opportunity to spend some of its cash pile.
The diversified insurance, industrial and investment company founded by Warren Buffet had cash and short-term securities holdings of $106.3 billion as of March 31, 2021, down 28% from $146.7 billion US Dollars as of December 31, 2021 equals AM ET)
The company used approximately $3.2 billion of its cash to repurchase its common stock in the first quarter of 2022, less than the $6.9 billion of stock it repurchased in the fourth quarter of 2021 Shares in Occidental (OXY) and $4.2 billion in HP Inc. (HPQ) and approval to purchase Alleghany (Y) for $11.6 billion.
Berkshire Hathaway’s (BRK.B) filing also showed that its stake in Chevron (CVX) has become one of the top four investments in other companies’ stocks at a fair value of $25.9 billion. (Added at 8:54 AM). As of December 31, 2022, Berkshire owned 38.2 million shares of Chevron, which would have been worth ~$6.22 billion at the end of Q1 2022, meaning the company bought approximately 121 million more Chevrons in the first quarter -Bought shares. (Added at 9:11 p.m. ET)
First quarter operating income of $7.04 billion compared to $7.29 billion in Q4 2021 and $7.02 billion in Q1 2021,
Insurance free float was ~$148 billion as of March 31, 2022, compared to ~$147 billion as of December 31, 2021.
Operating profit by segment vs. a year ago:
- Insurance – $47 billion vs $764 billion
- Insurance investment income – $1.17 billion versus $1.21 billion
- Railroad – $1.37 billion vs. $1.25 billion
- Utilities & Energy – $750M vs $703M
- Manufacturing Services & Retail – $3.03 billion versus $2.62 billion
- Other – $677 million vs $473 million
First quarter investment losses of $5.46 billion compared to first quarter 2021 gains of $4.69 billion; this included losses of ~$771 million in Q1 2022 and gains of ~$2.8 billion in Q1 due to changes in unrealized gains/losses in its equity investments. Total investment losses/gains also include realized after-tax losses of $612 million on sales of investments in Q1 2022 and realized after-tax gains on sales of investments of $1.41 billion in Q1 2022 Q1 2021. (Added at 8:25am ET) .
Net income for the first quarter, which includes gains or losses on investments and derivatives (most of which are unrealized), was $3.70 billion, or $2.47 per Class B share. This compares to $39.6 billion, or $17.79 per Class B share, in the fourth quarter and $7.64 billion, or $5.09 per share, in the year-ago quarter.
Impact of the Pandemic: COVID-19 continues to impact most of the company’s operations, particularly the insurance business. Claims at its GEICO unit continued to increase compared to the prior-year quarter, when the company reported lower claims frequencies for its auto insurance policies.
Overall, Berkshire Hathaway (BRK.B) said supply chain disruptions and higher costs continued in 2022 after the company periodically experienced temporary business closures and restrictions in 2021. Developing geopolitical conflicts contributed to supply chain disruptions, “resulting in rising costs for goods and services in many parts of the world.” (Added at 8:44 am ET)
The Annual Meeting Investor Questions and Answers begins at 10:15 am ET.
South African author Another Mountain’s Rock Investing talks about Berkshire Hathaway’s (BRK.B) secret growth investment.