2023-05-06 14:27:23
Berkshire Hathaway,
06 May, 17:27
Buffett holding’s profit up 13% driven by insurance business
Berkshire Hathaway’s insurance business more than doubled in operating profit. Buffett also made money on investments, mainly thanks to a large block of shares in Apple.
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Warren Buffett’s Berkshire Hathaway operating profit grew by 12.6% in the first quarter of 2023 to $8.065 billion, follows from reporting financial conglomerate. The main part of the growth came from the insurance business owned by the holding, with a total profit of $2.88 billion once morest $1.34 billion a year earlier (more than doubling).
In particular, auto insurer Geico earned $703 million following several unprofitable quarters. This was supported by higher average premiums received from car owners and lower spending. Bloomberg notesthat earlier the company’s performance was under the pressure of inflation – because of it, the cost of materials used in the repair of machines increased, and the cost of labor also increased. In addition, Geico faced serious competition within its segment.
Earnings for railroad operator Burlington Northern Santa Fe (BNSF) declined 9.04% year-on-year to $1.247 billion, while oil and gas company Berkshire Hathaway Energy Company fell 46.3% to $416 million. including a decline in revenue from U.S.-regulated utilities, Berkshire explains.
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Net profit, which was formed by adding operating profit and financial result from transactions in the stock market, grew 6.3 times compared to the first quarter of 2022 and amounted to $35.5 billion. At the same time, Buffett himself repeatedly reminded shareholders that “Analysis of profits or losses from investing activities in a given quarter usually does not make sense.”
Such a significant increase in this indicator reflects the dynamics of the prices of shares of companies such as Apple in the first quarter, writes CNBC. The tech giant, which holds the largest stake in Berkshire Hathaway’s portfolio, jumped 26.9% on the NASDAQ from the beginning of the year to the end of March.
As of March 31, 2023, regarding 77% of Berkshire Hathaway’s portfolio value was held by five companies:
For comparison, at the end of the fourth quarter, the share of the top 5 companies in the portfolio was estimated at regarding 75%. At the same time, the value of Apple shares in the portfolio of Berkshire Hathaway increased by $32 billion in the first quarter, the value of the package in Bank of America, on the contrary, decreased by $4.7 billion in three months, and in Chevron by $8.4 billion.
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Berkshire’s cash cushion rose from $128.6 billion to $130.6 billion in the quarter. notes BloombergBuffett’s conglomerate was a net seller of securities, and the difference between sales and purchases was $10.4 billion.
Berkshire Hathawa is known for buying back its own shares from the market with free funds. For this, the company has been criticized more than once, especially in 2021. In 2022, the volume of buybacks fell markedly, and as of March 31, 2023, it amounted to $4.4 billion – this is biggest Berkshire’s quarterly figure since the first quarter of 2021.
Dmitry Polyansky, Marina Anufrieva.
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