Berkshire Hathaway operating earnings soar 39% as Buffett's cash hoard swells to record $188 billion

Berkshire Hathaway announced on Saturday a significant year-over-year increase in operating earnings for the first quarter, with its cash reserves reaching record levels.

The conglomerate, led by Warren Buffett, reported an operating profit of $11.22 billion, a 39% increase from the same period last year. This increase was primarily driven by a 185% rise in insurance underwriting earnings to $2.598 billion, up from $911 million. Geico's earnings also saw a substantial increase, rising 174% to $1.928 billion from $703 million. Additionally, insurance investment income grew by 32% to over $2.5 billion.

Berkshire's railroad business generated a profit of $1.14 billion, slightly down from the first quarter of 2023. The energy division's earnings nearly doubled to $717 million from $416 million in the previous year.

First-quarter net earnings, which include fluctuations from Berkshire's stock investments, declined by 64% to $12.7 billion. Buffett has criticized these unrealized investing gains (or losses) as meaningless and misleading, but the company is required to report them based on generally accepted accounting principles.

The company's cash reserves reached a record high of $188.99 billion, up from $167.6 billion in the fourth quarter. Despite this significant cash holding, Berkshire did reduce its stake in Apple by 13%, although Apple remains its largest stock holding.

Berkshire also repurchased $2.6 billion in stock, an increase from $2.2 billion in the fourth quarter of 2023.

The report precedes the company's annual shareholder meeting, often referred to as "Woodstock for Capitalists," where Buffett will address questions from shareholders on a range of topics including the conglomerate's holdings, investing, and the economy.

This will be the first annual meeting since the passing of Vice Chairman Charlie Munger in November.

Year-to-date, Berkshire's Class A shares have risen by over 11%, reaching an all-time high in late February. The Class B stock has also gained more than 12% during this period.