Berkshire Hathaway Inc., a multinational conglomerate holding company based in Omaha, Nebraska, United States, maintains its primary focus on the insurance industry, utilizing the retained premiums to invest in a diverse range of subsidiaries, equity positions, and securities. Warren Buffett, the chairman and CEO, and Charlie Munger, the vice chairman, have spearheaded the company since 1965 and 1978, respectively, and are renowned for their commitment to value investing principles.
Ranked as the seventh largest constituent of the S&P 500 index and occupying the top position in the Forbes Global 2000, which incorporates both market value and fundamental data, Berkshire Hathaway is highly regarded in the business world. The company also holds the distinction of being one of the largest American-owned private employers within the United States.
Notably, Berkshire’s class A shares possess the highest per-share price among all publicly traded companies worldwide, reaching an extraordinary milestone of $500,000 in March 2022, as Warren Buffett has opted against stock splits.
As of May 26, 2023, Berkshire Hathaway’s net worth stands at an impressive $700.16 billion, a testament to its robust financial position and continued success in the market.
Here’s the breakdown of Berkshire Hathaway net worth (for the quarter ended March 31, 2023):
Name: | Berkshire Hathaway (BRK.A) |
Net Worth: | $700.16B |
Annual Revenue: | $316.639B |
Total Assets: | $997.072B |
Total Liabilities | $483.995B |
Table of Contents
Overview
Berkshire Hathaway reported strong financial performance in the first quarter of 2023, with earnings of $35.5 billion compared to a profit of over $5.5 billion in the same quarter of 2022. Operating earnings, which exclude the impact of market changes, rose by 13% for the quarter compared to 2022.
The company’s share repurchases contributed to a 14% increase in per-share operating income. Despite some weaker results in specific operating segments, overall operating income increased by 13% year-over-year.
Business Segments
Insurance
The insurance segment was the growth driver in the first quarter of 2023, with investment income increasing by 68% compared to 2022. The higher interest income from short-term investments contributed to this growth. Underwriting results improved for Berkshire Hathaway Primary Group and Berkshire Hathaway Reinsurance Group, but GEICO experienced underwriting losses due to rising claims severity from the higher valuation of used vehicles.
However, GEICO’s first-quarter results showed improvement, aided by increased premiums per auto policy and lower claims frequency. The company has also made progress in telematics, which is expected to bolster underwriting profits in the future.
Railroad
Berkshire’s railroad segment, Burlington Northern Santa Fe (BNSF), experienced a 9% decline in net operating earnings compared to 2022 but remained flat with pre-pandemic 2019 levels.
Higher pricing and a fuel surcharge driven by increased fuel prices contributed to higher revenue, but higher operating costs and lower unit volumes affected the bottom line. The management acknowledged labor issues in 2022 but noted progress in improving efficiency in the railroad operations.
Utilities and Energy
The utilities and energy segment, represented by Berkshire Hathaway Energy Company (BHE), had a challenging quarter with operating earnings 46% lower than in 2022 and 31% below 2019 levels. The segment was affected by a loss from the 2020 wildfires and the impact of a new Energy Profits Levy income tax in the U.K.
Berkshire Hathaway HomeServices, part of this segment, also experienced a decline in net earnings due to lower mortgage and refinance activity caused by higher interest rates and reduced closed brokerage transactions.
Manufacturing, Service, and Retailing
Within the manufacturing, service, and retailing segment, Berkshire saw mixed results. Aerospace-related businesses, such as Precision Castparts, showed improved earnings due to increased demand for aerospace products.
However, housing-related businesses like Clayton Homes and Shaw experienced a decrease in pre-tax profits, likely due to the impact of higher interest rates on home construction. Retailing businesses, including Berkshire Hathaway Automotive, Pampered Chef, See’s Candies, and furniture retailers, faced challenges in a more difficult operating environment, leading to lower earnings.
Non-Controlled Businesses
The non-controlled businesses segment includes companies where Berkshire holds significant ownership stakes. The after-tax equity method earnings increased significantly, primarily due to the inclusion of Occidental Petroleum’s earnings, as Berkshire is the company’s largest shareholder.
Berkshire’s acquisition of an additional ownership stake in Pilot, the largest operator of travel centers in North America, also contributed to the segment’s earnings.
Other Factors
During the first quarter, Berkshire Hathaway bought back nearly $4.5 billion of its stock, indicating confidence in its intrinsic value. The company made other purchases but was a net seller of publicly traded stocks, including a significant reduction in its holding of Chevron.
Moreover, Berkshire increased its stakes in five Japanese trading companies and may further increase its stake in the future.
Conclusion
Overall, Berkshire Hathaway’s financial performance in Q1 2023 was robust, with strong earnings driven by various segments, although some areas experienced challenges. The company’s focus on share repurchases and strategic investments demonstrates its commitment to creating long-term value for shareholders.
