Berkshire Hathaway (BRK) Q1 2021 results
Warren Buffett at the Berkshire Hathaway Annual Meeting in Los Angeles, California. May 1, 2021.
Gerard Miller | CNBC
Berkshire HathawayThe conglomerate’s operating profit rebounded as the conglomerate’s business recovered from the pandemic. Chairman Warren Buffett continued to aggressively buy back Berkshire shares in the first quarter, but at a slightly slower pace.
Berkshire reported first quarter operating income of $ 7.018 billion, up 20% from $ 5.871 billion in the same period a year ago. The conglomerate’s mishmash of businesses, including insurance, transportation, utilities, retail and manufacturing, saw signs of recovery amid the reopening of the economy.
In the first quarter, the company repurchased $ 6.6 billion of Berkshire shares, after a record $ 24.7 billion in buybacks last year instead of closing deals. The conglomerate recorded $ 9 billion in share buybacks in the fourth quarter.
Berkshire Hathaway’s cash stack grew about 5% in the quarter to over $ 145.4 billion. Just slightly below the record high seen at the end of the third quarter of last year.
Buffett has stayed on the sidelines as the trading environment becomes more competitive and market valuations have turned high. The legendary investor said at last year’s annual meeting that he hadn’t seen anything attractive to pull the trigger on a sizable acquisition like he has in the past.
Berkshire’s equity holdings also posted solid gains, rising to around $ 4.69 billion in the last quarter. However, Buffett told shareholders not to focus on quarterly fluctuations in investment gains and losses.
“The amount of investment gains (losses) in any given quarter is generally meaningless and provides net earnings per share figures which can be extremely misleading to investors who have little or no knowledge of accounting rules.” Berkshire said in a statement.
Thanks to the buyback program and a resumption of its operational activities, Berkshire’s Shares “B” grew by more than 18% in 2021 to reach a record high.
In total, Berkshire posted net income of $ 11.71 billion, or $ 7,638 per Class A share, in the first quarter. The conglomerate suffered a net loss of $ 49.75 billion, or $ 30,653 per Class A share, a year ago, as the fall of the stock market pandemic drastically reduced the value of many investments in shares of the company.
The conglomerate’s total revenue was $ 64.6 billion in the last quarter, higher than the Street estimate of $ 63.66 billion, according to Refinitiv.
Berkshire Annual Meeting of Shareholders will start on Saturday at 1:30 p.m. ET in Los Angeles with Buffett and Vice President Charlie Munger in attendance. The event will run virtually without participants for the second time.
Correction: Berkshire’s investment earnings increased by $ 4.69 billion in the first quarter. An earlier version of this story distorted the earnings.
Did you like this article?
For exclusive stock picks, investment ideas and global live streaming from CNBC
Register for CNBC Pro
Start your free trial now