Buffett's Berkshire reports $12-bn profit in Q1, buys back more stock

This comes a year after a major loss when the value of its stock investments plummeted because of the coronavirus pandemic

Warren Buffett's company reported a nearly USD 12 billion profit in the first quarter a year after a major loss when the value of its stock investments plummeted because of the coronavirus pandemic.

Berkshire Hathaway said Saturday that it earned USD 11.7 billion, or USD 7,638 per Class A share, during the first quarter as the paper value of its investment portfolio rebounded. A year earlier, Berkshire reported losing USD 49.7 billion, or USD 30,653 per share.

The conglomerate said that besides the investment gains, profit also improved at all its major divisions including insurance, utility, railroad, manufacturing and retail companies as the economy continued to recover from the pandemic during the first three months of this year.

 

Buffett has long said Berkshire's operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely. By that measure, Berkshire's operating earnings improved to USD 7.018 billion, or USD 4,577.10 per Class A share. That's up from USD 5.87 billion, or USD 3,617.62 per Class A share a year ago.

The four analysts surveyed by FactSet expected Berkshire to report operating earnings of USD 3,792.36 per Class A share.

Berkshire continued its streak of major stock repurchases by investing $6.6 billion in its own stock during the quarter. The Omaha, Nebraska-based company spent USD 25 billion on repurchases last year.

But Berkshire is still sitting on USD 145.439 billion in cash and short-term investments because Buffett has struggled to find major acquisitions for the company for several years.

Later on Saturday, Buffett will spend several hours answering questions at an online version of Berkshire's annual meeting. Buffett will be joined in answering questions by Berkshire vice chairmen Charlie Munger, Greg Abel and Ajit Jain. The company is holding its meeting online for the second year in a row because of the coronavirus pandemic. Normally the event draws a crowd of more than 40,000 to Omaha, Nebraska.

Berkshire Hathaway Inc. owns more than 90 companies, including the BNSF railroad and insurance, utility, furniture and jewelry businesses. The company also has major investments in such companies as Apple, American Express, Coca-Cola and Bank of America.