Berkshire Hathaway Reports Soaring Earnings & Cash Reserves; Warren Buffett Trims Apple (AAPL) Stake Yet Again

• Warren Buffett’s Berkshire Hathaway (BRKB) reports strong Q1 earnings and a significant increase in cash, with further growth expected.
• Operating earnings jumped 39% to $11.222 billion, driven by gains in insurance underwriting and insurance investment income.
• Berkshire’s cash rose to a record $188.99 billion, with Buffett expecting it to reach $200 billion by the end of June.

Berkshire Hathaway’s Q1 earnings exceed expectations, driven by gains in insurance underwriting and investment income. The company’s cash reserves also hit a new record, with further increases anticipated.

Berkshire’s Q1 Earnings

Operating earnings for Berkshire Hathaway surged 39% to $11.222 billion, fueled by significant gains in insurance underwriting and insurance investment income. Revenue rose by 5% to $89.87 billion, exceeding analysts’ expectations of a 2% increase to just over $87 billion. Despite a 64% plunge in total net income, which includes investment gains or losses, the decline was less than the anticipated 72%.

Buybacks and Cash Levels

Berkshire repurchased $2.6 billion worth of its own shares, following a $2.2 billion repurchase in 2023, bringing the total to $9.2 billion. The company’s cash reserves swelled to a new record of $188.99 billion, up from Q4’s $167.6 billion and Q3’s $157.2 billion. Buffett expects the cash levels to reach $200 billion by the end of June, stating that the company would love to spend it but will only do so on low-risk, high-return investments.

Berkshire Trims Apple Stock Holdings

Berkshire Hathaway reduced its Apple (AAPL) stake for the second consecutive quarter. The company reported that its Apple stake was worth $135.4 billion at the end of Q1, indicating a 13% decline in shares held to about 790 million. This reduction in Apple stock is likely a contributing factor to Berkshire’s significant cash increase. Despite this, Apple remains Berkshire’s largest investment, with Buffett expecting it to continue unless there are dramatic changes in capital allocation.

Berkshire Stock Performance

Berkshire stock rose 0.7% in Monday trading. Despite a slight 0.3% decrease in last week’s stock market trading, BRKB stock remains below the 50-day line with a 430 flat-base buy point. Investors could use a decisive move above the 50-day as an early entry point.

Conclusion

Berkshire Hathaway’s strong Q1 earnings and record cash levels indicate a positive outlook for the company. Despite a reduction in its Apple stake, the tech giant remains Berkshire’s largest investment. With Buffett’s anticipation of further cash increases and the potential for strategic investments, Berkshire’s financial trajectory appears promising.