Investment company Berkshire Hathaway, led by billionaire Warren Buffett, reported strong first-quarter results. The cash of the multinational conglomerate increased to a new record of $189 billion during the period under review. Despite making several acquisitions in recent years, including an insurance company and oil company shares, Buffett still has a substantial amount of money in his coffers.
In the absence of suitable acquisition targets, Buffett has been using money to buy back his own shares. During the first quarter of 2023, Berkshire Hathaway spent about $2.6 billion buying back its own shares. This move led to an increase in the operating profit of the company by 39 percent to $11.22 billion compared to $8.07 billion in the previous quarter.
The insurance industry has been a significant contributor to Berkshire’s first-quarter results. The underwriting result of Buffett’s insurance holdings increased by 185 percent from the comparison period to $2.598 billion, up from $911 million in the previous year. The result was improved mainly by the car insurance company owned by Berkshire Hathaway, Geico, which reported a significant improvement in results from the first quarter. Investment income in the insurance sector also increased by 32 percent from the comparison period to more than $2.5 billion.
However, Berkshire’s first-quarter net profit fell 64 percent from the comparison period to $12.7 billion compared to $35.5 billion in the previous year due to non-recurring entries such as changes in fair value and impairment losses on investments held at market value through equity securities and noncontrolling interests held at market value through equity securities and noncontrolling interests held at market value through debt securities at fair value through other comprehensive income (loss).
Buffett reduced his Apple holdings during the first quarter by approximately 13 percent despite holding it as his largest single stock holding at the end of March 2023 with worth of about 790 million shares according to CNBC and Talousmedia reports respectively.
In conclusion, Berkshire Hathaway’s investment arm is performing well across different industries with particular focus on insurance businesses while reducing its Apple holdings for better portfolio diversification strategy and management purposes
