Summary
Berkshire Hathaway's Q1 2020 report reflects a challenging quarter, heavily impacted by the onset of the COVID-19 pandemic. Net earnings attributable to shareholders plummeted to a loss of $49.7 billion, primarily driven by substantial unrealized investment losses totaling approximately $68.5 billion on equity securities due to market declines. Despite the significant headline loss, the company's diverse operating businesses, including insurance, railroad, utilities, and manufacturing, demonstrated resilience, with many deemed essential and continuing operations, albeit with slowed revenues. Cash and cash equivalents, along with short-term investments in U.S. Treasury Bills, remained robust, providing significant liquidity to navigate the uncertain economic environment.
Financial Highlights
29 data points| Revenue | $61.27B |
| Operating Expenses | $54.34B |
| Net Income | -$49.75B |
Key Highlights
- 1Net earnings attributable to Berkshire Hathaway shareholders resulted in a loss of $49.7 billion for the quarter, a significant decline from a $21.7 billion profit in the prior year, largely due to a $68.5 billion unrealized loss on equity securities.
- 2Total revenues for the quarter were $61.3 billion, a slight increase from $60.7 billion in Q1 2019, indicating the diverse nature of Berkshire's operations in initially weathering the early impacts of the pandemic.
- 3Cash, cash equivalents, and short-term investments in U.S. Treasury Bills totaled $124.7 billion as of March 31, 2020, demonstrating strong liquidity and a cautious approach to capital preservation amidst economic uncertainty.
- 4The insurance underwriting segment reported pre-tax earnings of $462 million, a slight decrease from $487 million in Q1 2019, with GEICO showing strong growth in premiums earned.
- 5Berkshire Hathaway Energy saw a decrease in after-tax earnings to $617 million from $667 million, attributed to lower utility margins and other factors, though renewable energy projects contributed positively.
- 6The railroad, utilities, and energy segments (BNSF and BHE) experienced a decrease in pre-tax earnings to $1.58 billion and $419 million respectively, impacted by lower volumes and evolving economic conditions.
- 7Share repurchases continued, with $1.7 billion spent on repurchasing Class A and B shares in the first quarter, reflecting management's belief in the company's intrinsic value.
- 8The company adopted new accounting standard ASC 326 for credit losses, resulting in a $388 million charge to retained earnings, primarily related to manufactured housing loans.