Berkshire Hathaway Inc (BRK-B: NYE) Q1 earnings report offered a mixed bag for investors. Despite overall earnings dropped significantly due to a decline in investment gains, the company’s core operating businesses delivered strong performances.
Market Volatility Hits Investment Gains:
The main reason behind the drop in earnings was the volatile stock market. Berkshire reported investment gains of $1.48 billion in Q1 2024, compared to a whopping $27.3 billion in the same period last year. This significant swing resulted in a decline in earnings per share (EPS) from $16.25 to $5.88.
Strong Operating Performance:
Despite the decline in earnings, Berkshire’s core businesses painted a brighter picture. Operating income surged 39.1% year-over-year to $11.22 billion, driven by strong performances in insurance and investment income. Insurance underwriting earnings skyrocketed by a staggering 185.2%, reaching $2.60 billion. Geico, a major contributor, witnessed a 174% jump in earnings to $1.93 billion. Additionally, insurance investment income saw a healthy increase of 32%.
Mixed Performance in Other Segments:
While the insurance sector thrived, Berkshire’s railroad business experienced an 8.3% year-over-year decline in earnings. However, the energy sector offered some positive news, with earnings rising 72.4% to $717 million.
Bottom line:
Berkshire’s renowned cash position remained a point of strength, reaching a record high of $188.99 billion, exceeding the previous quarter’s $167.6 billion.
