Berkshire Hathaway returns to quarterly profit on insurance and stock-market gains

  Warren Buffett's Berkshire Hathaway posted a quarterly profit on stock market gains and better insurance results. Berkshire BRK.B, -0.95% BRK.A, -1.29% reported net income of $ 11.7 billion, or $ 7,638 per Class A share equivalent, on Saturday, compared with a loss of $ 49.7 billion. $ Or $ 30,653 per Class A share equivalent for the same period last year. Operating profit, which excludes some investment results, increased to $ 7.02 billion from $ 5.87 billion a year ago. Berkshire had around $ 145.4 billion in cash at the end of the first quarter, up from around $ 138.3 billion at the end of 2020. The conglomerate runs a large insurance operation, as well as railways, utilities, industrial manufacturers, retailers, and even car dealerships. It also holds great investments, especially in the stock market. A change in accounting rules in recent years has meant that Berkshire's earnings often reflect the higher performance of the stock market, while operating earnings more accurately reflect the company's extensive business activities. Berkshire's insurance business posted operating income of $ 764 million for the first quarter, compared to $ 363 million a year earlier. Insurance investment income decreased from $ 1.39 billion to $ 1.21 billion. The company's rail, utility, and energy units earned $ 1.95 billion versus $ 1.75 billion. Major US stock indices closed the Berkshire period near record highs. The S&P 500 rose 5.8% in the first quarter of this year, while the Dow Jones Industrial Average rose 7.8%. Berkshire's Class A shares fell $ 4,300 to $ 412,500 on Friday. So far this year they have increased 20%. The company was a big taker of its own shares last year, spending approximately $ 6.6 billion on share buybacks in the first quarter. The company posted 20% annualized earnings from 1965 to 2020, beating 10.2% of the S&P 500 including dividends. Berkshire's performance has declined in recent years. The company's total return over the past five years has been 14%, compared to 18% for the S&P 500. The slump has made Berkshire an easier target for money managers seeking changes in corporate governance. While shareholder proposals calling for disclosures on climate change and employee diversity are likely to fail this year, institutional investors' calls for changes may get louder in the years to come. Berkshire will hold its annual general meeting later on Saturday. An expanded version of this story appears on WSJ.com. read more

https://businessservicesnews.ca/berkshire-hathaway-returns-to-quarterly-profit-on-insurance-and-stock-market-gains/

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