10-QPeriod: Q1 FY2024

BERKSHIRE HATHAWAY INC Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 6, 2024For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. reported solid financial results for the first quarter of 2024, demonstrating resilience across its diverse business segments. Net earnings attributable to Berkshire Hathaway shareholders were $12.7 billion, a significant decrease from the prior year's $35.5 billion, largely due to a substantial drop in investment gains, which were a key driver of the prior year's results. However, the underlying operating businesses showed strength, with improvements in insurance underwriting, particularly at GEICO, and robust performance in manufacturing, service, and retailing segments. The company maintained a strong financial position, with shareholders' equity increasing to $571.5 billion. Berkshire continued its disciplined capital allocation, repurchasing $2.6 billion of its own stock while maintaining substantial liquidity with $182.3 billion in cash, cash equivalents, and U.S. Treasury Bills. Despite the year-over-year decrease in net earnings, the operational performance underscores the company's stable and diversified business model.

Financial Highlights

29 data points
Beta

Revenue

$89.87B

Net Income

$12.83B

14.3% Net Margin

Total Assets

$1.07T

Cash & Equivalents

$36.16B

Free Cash Flow

$6.17B

Financial Statements
Beta
Revenue$89.87B
Operating Expenses$76.53B
Interest Expense$1.32B
Net Income$12.83B

Key Highlights

  • 1Net earnings attributable to Berkshire Hathaway shareholders were $12.7 billion for Q1 2024, down from $35.5 billion in Q1 2023, primarily due to a significant decrease in investment gains.
  • 2Insurance underwriting earnings increased substantially to $2.6 billion, driven by improved results at GEICO and the absence of significant catastrophe events, compared to $0.9 billion in the prior year.
  • 3GEICO's pre-tax underwriting earnings surged to $1.9 billion from $0.7 billion, benefiting from higher average premiums, lower claims frequency, and improved operating efficiencies.
  • 4Total revenues across all segments increased to $89.9 billion from $85.4 billion, indicating broad-based operational activity.
  • 5Shareholders' equity grew to $571.5 billion as of March 31, 2024, up from $567.5 billion at the end of 2023, reflecting retained earnings.
  • 6Berkshire repurchased $2.6 billion of its common stock during the quarter, demonstrating continued commitment to returning value to shareholders.
  • 7The company maintained a strong liquidity position with $182.3 billion in cash, cash equivalents, and U.S. Treasury Bills as of March 31, 2024.

Frequently Asked Questions

The primary driver for the decrease in net earnings from $35.5 billion in Q1 2023 to $12.7 billion in Q1 2024 was a substantial decline in investment gains. In Q1 2023, investment gains were $34.8 billion, whereas in Q1 2024, they were $1.9 billion. This volatility is characteristic of Berkshire's large investment portfolio.

The insurance segment showed strong performance, with pre-tax underwriting earnings increasing significantly to $3.3 billion, up from $1.2 billion in the prior year. This improvement was largely due to GEICO's significantly better underwriting results, a reduction in claims frequency, and the absence of major catastrophe losses in the current quarter, unlike the prior year.

Berkshire Hathaway continues to actively repurchase its shares when it believes the price is below intrinsic value. In Q1 2024, the company repurchased $2.6 billion of its Class A and Class B common stock. The repurchase program has no set expiration date and will continue as long as financial strength and liquidity targets are maintained, specifically ensuring cash, cash equivalents, and U.S. Treasury Bills do not fall below $30 billion.

The filing highlights potential risks including significant wildfire litigation related to PacifiCorp, with probable estimated pre-tax losses of approximately $2.4 billion recorded as of March 31, 2024, of which $1.7 billion remained unpaid. Additionally, HomeServices of America is involved in antitrust litigation with a proposed settlement of $250 million over four years. The company also faces ongoing risks related to market price volatility of its equity investments, potential catastrophic events, and changes in laws and regulations.