Buffett invests a lot of Berkshire Hathaway’s money

OMAHA, Neb. (AP) – Berkshire Hathaway’s first-quarter profits fell more than 53% due to a sharp swing in the paper value of its investments, but Warren Buffett found ways to put some of the huge work to work. the company’s pile of cash, giving shareholders something to talk about at Saturday’s annual meeting.

Berkshire said it earned $5.46 billion, or $3.702 per Class A share, in the quarter. That’s down from $11.7 billion, or $7.638 per Class A share, a year ago.

But the main change in the quarter was that Berkshire’s cash mountain shrank to $106 billion from $147 billion at the start of the year, when it invested $51 billion in stocks. Buffett also spent $3.2 billion buying back shares of Berkshire.

During the first quarter, Buffett agreed to buy insurance conglomerate Alleghany for $11.6 billion and made multi-billion dollar investments in HP Inc. and Occidental Petroleum. However, he has yet to disclose all of his stock purchases, so it’s not immediately clear what else Berkshire has invested in this year.

But Berkshire said its stake in oil giant Chevron reached $26 billion at the end of the quarter, from $4.5 billion at the start of the year. Edward Jones analyst Jim Shanahan said with investments from Chevron and Occidental combined, Berkshire now had more than $40 billion invested in the oil sector.

But Berkshire said the value of its investments fell by $1.58 billion in the first quarter while a year ago this paper estimate of its investments had increased by $4.7 billion. This accounted for most of the change in net profit.

Buffett says Berkshire’s operating profits are a better measure of company performance because they exclude investment gains and losses. By this measure, Berkshire’s earnings were flat at $7.04 billion, or $4,773.84 per Class A share, from $7.018 billion, or $4,577.10 per Class A share, it a year ago.

This exceeded Wall Street expectations. The four analysts polled by FactSet expected Berkshire to report operating profit of $4,277.66 per Class A share.

Berkshire said on Saturday that earnings improved at most of its businesses, including the railroads, utilities and manufacturing businesses it owns, but underwriting income fell at its oil companies. assurance.

In addition to investments, Berkshire Hathaway owns more than 90 businesses, including the BNSF Railroad, several major utilities, Geico Insurance, and an assortment of manufacturing and retail businesses. Tens of thousands of shareholders gathered in an Omaha arena not far from the company’s headquarters on Saturday to listen to the vice presidents of Buffett and Berkshire spend hours answering all the questions.

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