11 hours ago
1626
Berkshire Hathaway (BRK.A, BRK.B) posted a bigger first-quarter profit under Greg Abel, while its cash mountain climbed near $400 billion and showed how hard it still is for the company to find deals at prices it likes.
The company said operating profit rose 18% to $11.35 billion, equal to about $7,891 per Class A share, compared with $9.64 billion a year ago. The numbers came even as weaker demand hit some of Berkshire’s consumer-facing businesses.
Net income more than doubled to $10.1 billion, or $7,027 per Class A share, from $4.6 billion last year. Berkshire still tells investors not to treat that figure like the main scorecard because it includes paper gains and losses from stocks the company may keep.
Berkshire sells more stocks as Abel keeps the cash pile close to $400 billion
Berkshire ended March with $380.2 billion in cash. That figure did not include some U.S. Treasury bill purchases that had not settled by March 31. The real point is plain: the cash pile is huge, and Berkshire still has not found enough large targets that fit its value style.
The company has been waiting for a major acquisition for years. Prices across public and private markets have made that harder. So Berkshire kept cash high and sold more stocks than it bought. During the first quarter, it sold $8.1 billion more equities than it purchased. That made the period its 14th straight quarter as a net seller.
A large part of that selling has centered on major holdings, led by Apple (AAPL). Berkshire still owns public stocks, but the direction has been clear. Cash is winning over fresh buying.
The company did spend money in one clear place. In January, Berkshire paid $9.5 billion for Occidental Petroleum’s (OXY) chemicals business. It also bought back $234 million of its own stock during the quarter. That was the first Berkshire buyback since May 2024. The company did not repurchase shares in the first two weeks of April.
The quarter also showed pressure under the surface. Berkshire owns dozens of businesses across insurance, energy, rail, retail, manufacturing, and services. Some of the consumer-linked units had a rougher period because households are still dealing with uncertain economic conditions, higher costs, and tighter spending choices.
Greg warns Geico faces price pressure as Warren blasts one-day options
Berkshire’s insurance businesses had a better first quarter, but Greg told shareholders at the annual meeting in Omaha that competition is still a problem. He said, “The reality is that … as our insurance business softens, we cannot realize the value we should for the related risk.”
Geico, the Berkshire auto insurer, stayed in the middle of that pressure. Greg said the company has been trying to balance rate increases with customer retention. Drivers are searching harder for cheaper policies, and that has made growth harder.
“We’ve seen unprecedented shopping activity across the auto space,” Greg said. He said Geico has “worked hard to segment” its customers so it can keep as many policyholders as possible while premiums rise. He also said, “It’s not going to be easy to just restart the growth engine.”
Warren Buffett also spoke about the current trading mood in markets. He compared the market to “a church with a casino attached,” where people can go from investing to gambling very fast. He said buying or selling one-day options is not investing. He called it “gambling.”
Warren said the amount of that trading is massive and that people have never looked more eager to gamble in markets. He said this does not mean real investing is dead, but it does mean many prices can look stupid. He pointed to short squeezes and mentioned Avis Budget (CAR), saying the company has been around for 50 years, yet still got dragged into the week’s trading frenzy.
He also said regulation has not stopped people from trying to dodge rules. His point was blunt. Some traders spend more energy finding loopholes than following the rulebook.
Becky Quick of CNBC asked Warren about Jerome Powell after Jerome’s latest FOMC meeting as chair. Becky said Jerome planned to stay at the Federal Reserve for the foreseeable future, partly because of threats he has faced.
Warren said, “I’ll feel better when he’s there better than when he’s not.” He compared that feeling to having Paul Volcker at the Fed. Warren also said economists can miss the biggest risks, using old textbooks as an example. He said zero interest rates were barely treated as a serious topic in older economics books, even though they later became one of the biggest forces in modern finance.
If you want a calmer entry point into DeFi crypto without the usual hype, start with this free video.
English (US)