OMAHA, Neb. (AP) — Berkshire Hathaway's first quarter profits plummeted along with the paper value of its investments, but the company said Saturday that most of the businesses it owns outright performed well.
The company reported reported a $12.7 billion profit, or $8.825 per Class A share, in the quarter. That’s roughly one-third of last year's $35.5 billion, or $24,377 per A share.
The figures were heavily influenced by a large drop in the paper value of Berkshire’s investments. Buffett encourages investors to pay more attention to the conglomerate’s operating earnings that exclude the investment figures. Operating earnings jumped 39% to $11.222 billion from last year’s $8.065 billion as its insurance companies showed strong results.
On a per share basis, this year's first quarter operating figure amounts to $7,796.47 per Class A share, beating three analysts' estimates by FactSet Research, who predicted $6,701.87 per Class A share.
Buffett was a net seller of $17 billion in stocks during the quarter, including trimming about 13% of Berkshire’s massive Apple stake. At $135.4 billion, the iPhone maker still accounts for the biggest share of Berkshire's $364 billion portfolio. Buffett said he expects it to remain so even up to when his successor Greg Abel takes over.
The estimated value of Berkshire’s Apple stake suggests Buffett sold off more than 100 million shares. In the past, Buffett has said he invested in Apple’s stock because of how devoted consumers are to the company's products, similar to consumer brands he loves like Berkshire's own See's Candy.
Apple CEO Tim Cook, who is at the Berkshire meeting, told CNBC that he still considers it a privilege to have Berkshire as a major shareholder, and he knew about the sales before Berkshire disclosed them Saturday.
Berkshire reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago, as Geico in particular continued to improve its results. However, BNSF railroad’s profits dropped 8% to $1.143 billion.
Most of Berkshire's many other companies delivered solid results, including a 72% jump in operating profits at the utility unit, adding $717 million to Berkshire’s total.
Revenue grew 5% to $89.87 billion in the quarter. The two analysts who reported estimates to FactSet predicted $87.044 billion.
With no major acquisitions in sight, Berkshire’s cash pile climbed to a record $188.993 billion even after it spent $2.6 billion repurchasing shares during the first three months of the year. Holdings including Geico insurance, BNSF railroad, several major utilities and an assortment of dozens of others keep generating mountains of cash.
“We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.
Harold and Caroline Ernst of St. Louis chat with fellow shareholders as they wait for the Berkshire Hathaway annual meeting to begin on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
From left, D'Ann Rhoten takes a photo of Brittany Thornton and Melissa Shapiro in the exhibit hall of the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Michelle King of San Francisco does yoga in the See's Candies booth before the arrival of shareholders for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
LOUISVILLE, Ky. (AP) — Those big, crooked numbers bunched on one side of his scorecard made Mark Hubbard wonder if his luck was running out.
He was thankful to straighten out things on the other side and remain within sight of the leaders at the PGA Championship.
Hubbard’s 3-under 68 on Friday was three strokes off his opening-round score at Valhalla Golf Club, owing to three bogeys over a five-hole stretch on the front nine. Six other birdies more than erased those and kept him within three shots of leader Xander Schauffele (-12) on a rainy Friday delayed and dampened by the predawn death of a pedestrian worker, soon followed by the shocking arrest of world No. 1 Scottie Scheffler because of an altercation with Louisville police.
“I putted really well today,” said Hubbard, who needed a quick recovery with a morning start following a late Thursday evening finish. “I wasn’t moving quite as well, driving it quite as well as yesterday, so it made it a little tougher.
“Just didn’t quite have my legs under me, but my putter really showed up and kind of kept me in there.”
Hubbard said his agenda wasn’t seriously thrown off by the second-round delay that came after John Mills, a 69-year-old who worked for a vendor at the tournament, was struck and killed by a shuttle bus while crossing the road to Valhalla. Scheffler was arrested a short time later for failing to follow police instructions as he tried to get around traffic and onto the course.
Scheffler, the reigning Masters champion, was released and returned to Valhalla 56 minutes before teeing off and shooting 5-under 66 to tie for fourth at 9-under with Hubbard, Thomas Detry and Bryson DeChambeau.
Hubbard expressed thoughts and prayers for Mills’ family and empathy for Scheffler’s situation.
The Denver native then went out and birdied two of his first three holes, along with the 18th, that send him on his way toward making the cut in all 14 of the tournaments he has played this year, slowed only slightly by bogeys on the second, fifth and sixth holes.
“It’s been kind of soft all week,” Hubbard said of several days of showers at Valhalla. “I think the biggest difference was the rough was a lot more penal today, so I just kind of had to navigate that. I didn’t drive it as well, so I made a few more bogeys because of that.”
Hubbard, who turns 35 next Saturday, has two top-5 finishes this year and is No. 34 in the FedEx Cup this year. It keeps him in the mix for the ultimate goal — top 50 to qualify for all the signature events, perhaps even his first trip to the Tour Championship for the top 30.
A big weekend at Valhalla would contribute toward that. This is his third PGA Championship, and his confidence is higher.
“Going into the week I felt like this was the first time my game was in a position where I felt like I could do that, whereas before I just showed up and have been kind of happy to be there,” he said.
“I think that showed just from a mental standpoint and confidence standpoint. I think this is a good major course for me. There’s so many that aren’t.”
Mark Hubbard hits from the fairway on the 18th hole during the second round of the PGA Championship golf tournament at the Valhalla Golf Club, Friday, May 17, 2024, in Louisville, Ky. (AP Photo/Matt York)
Mark Hubbard reacts after missing a putt on the 16th hole during the second round of the PGA Championship golf tournament at the Valhalla Golf Club, Friday, May 17, 2024, in Louisville, Ky. (AP Photo/Matt York)
Mark Hubbard watches his tee shot on the 18th hole during the second round of the PGA Championship golf tournament at the Valhalla Golf Club, Friday, May 17, 2024, in Louisville, Ky. (AP Photo/Matt York)
