Paul Morigi
Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A) Q1 operating earnings gained 13% Y/Y as insurance underwriting and investment income surged, the company said Saturday.
Insurance investment income was helped by higher interest rates, while its GEICO unit's pretax underwriting earnings in Q1 were bolstered by higher aveage premiums per auto policy, lower advertising costs, and favorable prior accident year development.
The company bought back ~$4.4B of its common stock during the quarter, compared with ~$2.6B in the last quarter of 2022.
The investment giant had $130.6B of cash and short-term securities on its balance sheet as of March 31, 2023, up slightly from ~$128.7B at Dec. 31, 2022.
Q1 operating earnings of $8.07B vs. $6.71B in Q4 2022 and $7.16B in the year-ago quarter.
Insurance float was $165B at March 31, 2022, about even ~$164B at Dec. 31, 2022.
Operating earnings by business segment:
- Insurance - underwriting: $911M vs. $244M in Q4 2022 and $167M in Q1 2022; GEICO pretax underwriting earnings jumped to $703M in Q1 2023 compared with -$178M in Q1 2022.
- Insurance - investment income: $1.97B vs. $1.17B in the year-ago period;
- BNSF: $1.25B vs. $1.37B in the year-ago quarter;
- Berkshire Hathaway Energy Company: $416M vs. $775M a year ago;
- Other controlled businesses: $3.07B vs. $3.03B in Q1 2022;
- Non-controlled businesses: $568M vs. $282M a year ago;
- Other: -$111M vs. $370M a year earlier.
Investment and derivative gains, most of which are unrealized, increased to $27.4B in Q1 2023 from $11.5B in Q4 2022 and reversed from -$1.58B in Q1 2022. That resulted in net earnings of $35.5B in the most recent quarter vs. $18.2B in Q4 2022 and $5.58B in Q1 2022.
As of March 31, 2023, about 77% of Berkshire Hathaway's (BRK.B) $328.2B of equity holdings, at fair value, were concentrated in five companies, up from a 75% concentration of a $308.8B portfolio at Dec. 31, 2022.
Its Apple (AAPL) stake, at fair value, increased to $151.0B from $119.0B; Bank of America (BAC) declined to $29.5B from $34.2B; American Express (AXP), $25.0B vs. $22.4B; Coca-Cola (KO), $24.8B vs. $25.4B, and Chevron (CVX), $21.6B vs. $30.0B.
Coming up at 10:15 AM ET is the company's annual meeting, where Chairman and CEO Warren Buffett, and Vice Chairmen Charlie Munger, Greg Abel, and Ajit Jain will answer stockholder questions.