OMAHA, Neb. (AP) — Warren Buffett’s company reported a steep drop in profits Saturday as the paper value of its investments fell, but packed an arena in Omaha to hear him answer questions. Tens of thousands of shareholders gathered. annual meeting In hindsight, we can recall that many of Hathaway’s businesses at Berkshire were doing well.
Berkshire reported a profit of $12.7 billion, or $8.825 per Class A share, for the quarter. That’s about one-third of the $35.5 billion, or $24,377 per A share, Berkshire reported a year ago.
However, these numbers were largely driven by a significant decline in the paper value of Berkshire’s investments. That’s why Buffett advises investors to pay more attention to a conglomerate’s operating income, which excludes the amount invested. According to this measure, Berkshire’s operating income rose 39% to $11.222 billion from $8.065 billion a year ago, driven by strong performance from insurance companies.
Three analysts surveyed by FactSet Research expected operating earnings per Class A share of $6,701.87.
Berkshire reported that the insurance company’s underwriting profit was $2.6 billion, up from $911 million in the same period last year.
BNSF Railway’s profits were disappointing, down 8% to $1.143 billion, but the operating income of its railroad division rose 72%, adding $717 million to Berkshire’s total, and its operating income fell 8% to $1.143 billion. Most of the other companies posted strong results.
Berkshire’s revenue for the quarter rose 5% to $89.87 billion. Two analysts reporting estimates to FactSet expected revenue of $87.044 billion.
With no major acquisitions in sight, Berkshire’s cash pile continues to grow, reaching a record $188.993 billion in the quarter. Berkshire even spent $2.6 billion on stock buybacks in the first three months of this year, but its companies, including Geico Insurance, BNSF Railway, several major power companies, and dozens of others, are on the Mt. continues to generate cash.
Within 30 minutes of opening on Saturday, the main arena was already three-quarters full, as people are always eager to glean a bit of wisdom from billionaire Warren Buffett.But this year, a key element is missing: It will be the first meeting since Vice Chairman Charlie Munger. died.
“He was the Sriracha sauce at Berkshire Hathaway meetings,” said Bill Smead, an investor who has been a fixture at the event for 14 years. “He gave it a lot of flavor.”
For decades, Mr. Munger has shared the stage with Mr. Buffett each year in a marathon question-and-answer session that is the centerpiece of the event. Mr. Munger usually let Mr. Buffett take control with an extensive response that lasted several minutes. And Munger himself gets to the point directly. He called cryptocurrencies stupid, told people to “marry the best guy who will get you,” and compared many unproven internet businesses to “bastards” in 2000. remembered.
He and Buffett functioned as a classic comedy duo, with Buffett providing lengthy setups for Munger’s witty one-liners. They joined forces to transform Berkshire into a company comprised of a variety of interests, from an ailing textile mill to insurance companies such as Geico to BNSF Railway, several major power companies and various other companies. turned into a huge conglomerate.
Mr. Munger often summed up the key to Berkshire’s success as “rather than trying to be extremely smart, we try not to be consistently stupid.” He and Buffett were also known for sticking to businesses they understood well.
“Warren was always doing at least 80 percent of the talking, but Charlie was a great foil,” said Whitney Tilson, an analyst at Stansberry Research.
But their absence may give shareholders a chance to get to know Berkshire better about the two executives who directly oversee the company: Ajit Jain, who runs the insurance division, and Greg Abel, who runs everything else. do not have. Abel will eventually succeed the 93-year-old Buffett as CEO.
Morningstar analyst Gregory Warren said he hopes Mr. Abel will be more vocal this year and give shareholders a glimpse of his brilliance. Berkshire executives talk about.Since Munger Please let me slide At the company’s annual meeting three years ago, Buffett reiterated that Abel would be his successor. reassure investors That he is confident in his choice.
Experts say the company has a strong culture built on integrity, trust and independence, and a strong roster of executives ready to take over.
“Greg is a rock star,” said Chris Blomstran, president of Semper Augustus Investment Group. “The bench is deep. He won’t have the same humor in meetings. But I think we all come here every year to remind ourselves to be reasonable.”
___
For more from The Associated Press on Warren Buffett, go here. https://apnews.com/hub/warren-buffett. Click here for more Berkshire Hathaway news. https://apnews.com/hub/berkshire-hathaway-inc.Follow Josh Funk online https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite.
