By
Tokoni Uti
December 4th, 2023
For the first time since Q1 2021, Berkshire Hathaway repurchased stock worth $4.4 billion smashing the previous record of $2.8 billion.
According to a report, Berkshire Hathaway Inc (NYSE: BRK), an American multinational conglomerate company, gained almost 13% year-on-year operating earnings in Q1 2023. The company’s insurance business solely contributed to the increase in operating earnings. Berkshire Hathaway’s latest financial reports indicate an operating profit of $8.065 billion in the year’s first quarter. Meanwhile, the Warren Buffett company announced operating earnings of $7.16 billion.
The profit from Berkshire Hathaway insurance underwriting jumped from the previous year’s $167 million to $911 million in Q1 2023. In addition to the bumper season, insurance investment income increased by 68% from $1.170 billion to $1.969 billion.
Berkshire Hathaway Q1 2023 Financial Reports
Geico, an automobile insurance company owned by Berkshire Hathaway, recorded a massive turnaround turning in a profit of $703 million. In 2021, the auto insurer lost a $1.9 billion pretax underwriting loss giving away its market share to its immediate competitor, Progressive. During a short talk with Ajit Jain, Berkshire Hathaway’s vice chairman of insurance operations, he noted that telematics was a major factor responsible for Geico’s underperformance.
Unfortunately, YoY earnings from Berkshire Hathaway’s railroad business and its energy company declined tremendously. However, operating earnings from businesses classified as “other controlled businesses” and “non-controlled businesses” went up. The company’s cash hoard also spiked to $130.616 billion from the last quarter’s $128 billion.
For the first time since Q1 2021, Berkshire Hathaway repurchased stock worth $4.4 billion smashing the previous record of $2.8 billion. The net earnings of Berkshire Hathaway for Q1 2023 sit at $35.5 billion, a significant rise from the prior year’s $5.6 billion. At the end of Friday’s stock session, Berkshire Class A shares soared by 4.9%, about 3% below the all-time high. The fiscal reports preceded the company’s annual shareholders meeting tagged “Woodstock for Capitalist”.
Highlights of Berkshire Hathaway Annual Shareholders Meeting
During the annual shareholders meeting, Warren Buffett, the CEO of Berkshire Hathaway, maintained a subtle atmosphere while attending to shareholders’ questions. The majority of investors were worried about the economy and recent market volatility. He explained that commercial real estate could struggle with higher borrowing rates and create pressure on banks. However, he assured me that bank deposits are safe. Though Berkshire Hathaway recorded a higher YoY in Q1 2023, Buffett said his businesses would see lower earnings year-over-year due to reduced economic activity.
The sage investor clarified the rumors that Berkshire Hathaway would acquire Occidental Petroleum. He said his conglomerate company would not buy control of the petroleum company. Buffet also discussed the importance of value investing, saying more investment opportunities will arise in the future.
Speaking on the plot of the BRICS countries against the US dollar dominance, the Oracle of Omaha said:
“We are the reserve currency, I see no option for any other currency to be the reserve currency.”
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