(Bloomberg) — Berkshire Hathaway Inc.\u2019s cash pile soared to its highest level ever and operating earnings jumped in Greg Abel\u2019s first quarter as chief executive officer.<\/p>\n
Most Read from Bloomberg<\/p>\n
After a slight decrease late last year, the firm\u2019s cash hoard jumped to $397 billion in the first quarter as it offloaded a net $8.1 billion of equity holdings in the period, the Omaha, Nebraska-based conglomerate said in a statement Saturday. Operating earnings, meanwhile, got a boost from an improvement in underwriting results in its vast insurance businesses.<\/p>\n
Abel, who replaced legendary investor Warren Buffett as CEO this year, also resumed stock buybacks, handing shareholders a payout for the first time in more than a year. Berkshire bought back $234.2 million of its own shares in the period.<\/p>\n
The results show how Abel is starting to put his mark on Berkshire, where there are some signs investors still aren\u2019t sold on the new CEO. Once synonymous with consistent outperformance, the $1 trillion conglomerate\u2019s shares have been trounced by the broader market since Warren Buffett announced he was retiring and handing Abel the reins a year ago.<\/p>\n
Abel took to the stage and address shareholders in Omaha on Saturday for his inaugural annual meeting as CEO. This is the first time in decades that Buffett won\u2019t be leading the event after the 95-year-old announced he would step down from his role last year \u2014 though he was still in attendance and even shared a few remarks to help kick off the meeting.<\/p>\n
Berkshire\u2019s earnings are typically closely watched because the conglomerate\u2019s businesses \u2014 ranging from insurance to railroads to energy and manufacturing \u2014 provide a snapshot of the health of the US economy.<\/p>\n
Abel has previously said that he and Buffett had determined that the intrinsic value of the firm\u2019s shares was higher than their market value, prompting them to restart buybacks. Berkshire\u2019s stock declined 5.9% this year as of market close on Friday.<\/p>\n
Underwriting earnings from the firm\u2019s collection of insurance businesses surged to $1.7 billion, up about 29% from a year ago, when the units were hit by losses tied to the Los Angeles wildfires.<\/p>\n
Geico Struggles<\/p>\n
Still, Geico posted a 35% decline in pretax underwriting earnings, as the unit faced more losses and spent more to gain new clients.<\/p>\n
\u201cMost of Geico\u2019s peer group this quarter posted significantly improved underwriting results,\u201d said Cathy Seifert, an analyst at CFRA Research, on the contrast between competitors and Geico. \u201cThey\u2019re a big unit and that\u2019s a big deterioration.\u201d<\/p>\n
Net profit at its railroad unit BNSF rose 13% to $1.4 billion, relieving pressure on BNSF management, led by CEO Katie Farmer, to improve the unit\u2019s operating margin and close the gap with its most efficient peers. Abel had given the division\u2019s management a clear mandate to improve the business on those fronts. He said at the meeting that while he\u2019s pleased with the first-quarter results, there\u2019s still room for improvement.<\/p>\n
\u201cWe had heard that there was some cost efficiencies being implemented at BNSF, and that showed up in the first-quarter results,\u201d Seifert said.<\/p>\n
Abel decided to sell the equity holdings that were previously managed by Todd Combs, Berkshire\u2019s former stock picker, the Wall Street Journal reported last month, citing unnamed people familiar with Berkshire\u2019s investments. JPMorgan Chase & Co. announced in December that it hired Combs for a broad investing advisory role.<\/p>\n
Berkshire decided against a new impairment charge on Kraft Heinz Co. \u2014 one of its largest equity holdings \u2014 for now, even as the book value of its holding in the packaged food giant exceeds its fair value by $1.4 billion. Last year, the firm took a $3.8 billion hit, as the stock\u2019s performance continued to disappoint.<\/p>\n
Total operating earnings added up to $11.35 billion, up nearly 18% from a year earlier, in the three months through March.<\/p>\n
(Updates with additional details and context throughout.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Berkshire Hathaway Inc.\u2019s cash pile soared to its highest level ever and operating earnings jumped in…\n","protected":false},"author":2,"featured_media":23581,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[14474,14468,281,14472,14473,14471,14398,8,14470,9,14469,7,2888],"class_list":{"0":"post-23580","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-stories","8":"tag-berkshire","9":"tag-berkshire-hathaway","10":"tag-bloomberg","11":"tag-chief-executive-officer","12":"tag-conglomerate","13":"tag-equity-holdings","14":"tag-greg-abel","15":"tag-headlines","16":"tag-insurance-businesses","17":"tag-news","18":"tag-stock-buybacks","19":"tag-top-stories","20":"tag-warren-buffett"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@news\/116505854777276413","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/23580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/comments?post=23580"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/23580\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media\/23581"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media?parent=23580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/categories?post=23580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/tags?post=23580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}