Billionaire and veteran investor, Warren Buffett’s Berkshire Hathaway has forecast a more than 5x jump in net earnings for the first quarter of 2023, driven by gains from stocks such as Apple Inc. Also, higher income from investments boosted operating profit. The top-line front also saw strong growth in the first quarter.
The strong showing is likely to bring relief to shareholders who will be attending Berkshire’s annual meeting on Saturday to hear from the company’s top executives.
Here are the key highlights of the company’s earnings for the first quarter of 2023:
1. Net income to shareholders of Berkshire Hathaway rose 536.27% to $35.5 billion in the first quarter of 2023, compared to $5.58 billion in the previous year’s first quarter.
2. Average net income per Class A share equivalent was $24,377 in the first quarter of the current year, up from $3,784 in the year-ago period. Net income equal to $16.25 per Class B share in the first quarter of 2023 compared to $2.52 in the first quarter of 2022.
3. Revenue for the first quarter of 2023 was $85.39 billion, up 20.53% from $70.84 billion in the prior year quarter.
4. Operating income for the quarter under review stood at $8.065 billion as against $7.160 billion a year ago.
5. In addition, net profit from investments and derivatives stood at $27.439 billion in the first quarter of 2023, compared to a loss of $1.580 billion a year earlier.
6. Berkshire included changes in unrealized gains and losses on its equity security investments in first quarter earnings. It said, investment gains (losses) included a gain of approximately $23.4 billion in the first quarter of 2023 and a loss of approximately $771 million in the first quarter of 2022.
7. The Company’s investment gain (loss) also includes an after-tax gain on the sale of investments of $1.7 billion in the first quarter of 2023 and a loss of $612 million in the first quarter of 2022.
8. In 2023, investment gains also include a net remeasurement gain of approximately $2.4 billion related to Berkshire’s acquisition of an additional 41.4% ownership interest in Pilot Travel Centers.
9. About $4.4 billion was used to buy back shares of Class A and Class B common stock during the first quarter of 2023, Berkshire said. There were 1,450,152 Class A par shares outstanding as of March 31, 2023.
10. As of March 31, 2023, insurance inflows were approximately $165 billion, up nearly $1 billion from the previous year.
11. Under investments in equity securities, approximately 77% of Berkshire’s total fair value was concentrated in five companies. These were – American Express Company ($25.0 billion); Apple Inc. ($151.0 billion); Bank of America Corporation ($29.5 billion); The Coca-Cola Company ($24.8 billion); and Chevron Corporation ($21.6 billion).
12. Berkshire’s consolidated borrowings as of March 31, 2023 stood at $123.6 billion, of which more than 95% was undertaken by the company’s parent company, BHFC, BNSF, BHE and its subsidiaries, and Pilot. In the first quarter of 2023, we paid down approximately $6.2 billion in term debt and increased short-term borrowings by approximately $1.1 billion.
13. Berkshire closed the quarter with $130.6 billion in cash and equivalents.
14. Berkshire said that the consequences of the COVID-19 pandemic continue to impact its operating businesses to varying degrees.
15. In addition, Berkshire said, “the development of geopolitical conflicts, supply chain disruptions and government actions to slow inflation in recent years have generated divergent impacts on our operating businesses.”
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