© Reuters. FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, pauses whereas taking part in bridge as a part of the corporate annual assembly weekend in Omaha, Nebraska U.S. Could 6, 2018. REUTERS/Rick Wilking/File Picture
By Jonathan Stempel
OMAHA, Neb. (Reuters) – Warren Buffett’s Berkshire Hathaway (NYSE:) Inc dove into fairness markets within the first quarter, spending greater than $51 billion on shares together with a a lot bigger stake in Chevron Corp. (NYSE:)
Berkshire, which Buffett has run since 1965, additionally stated on Saturday quarterly working revenue was little modified from a yr earlier, with some companies in a position to fend off provide chain disruptions. Geico, the automotive insurer, posted an underwriting loss.
The Omaha, Nebraska-based firm additionally stated it repurchased $3.2 billion of its personal inventory within the quarter, however none within the first three weeks of April.
Berkshire’s disclosures recommend that Buffett has lastly discovered giant new makes use of to get rid of Berkshire’s money pile, which shrank greater than $40 billion to about $106 billion.
The Chevron stake grew to $25.9 billion as of March 31 from simply $4.5 billion three months earlier, as oil costs surged larger following Russia’s invasion of Ukraine.
That got here on the heels of Berkshire’s buy of nicely over $6 billion of inventory in Occidental Petroleum Corp (NYSE:), the place it already had a $10 billion most popular inventory stake.
Buffett has additionally dedicated $11.6 billion to purchase insurance coverage firm Alleghany (NYSE:) Corp, and purchased $4.2 billion of HP Inc (NYSE:) inventory.
Berkshire ended March with $391 billion of shares, greater than half of the corporate’s $712 billion general market worth.
Different companies embody the BNSF railroad, Berkshire Hathaway Vitality, and a wide range of manufacturing and retail operations together with See’s Candies and Dairy Queen ice cream.
NET RESULTS FALL
First-quarter working revenue edged as much as $7.04 billion, or about $4,786 per Class A share, from $7.02 billion a yr earlier.
Berkshire’s internet revenue fell 53% to $5.46 billion, or $3,702 per Class A share, to $11.71 billion, or $7,638 per Class A share, a yr earlier.
Web outcomes included $1.58 billion of positive factors and losses from shares together with Apple Inc (NASDAQ:), in addition to Chevron.
An accounting rule requires Berkshire to report unrealized positive factors and losses with internet outcomes, and Buffett urges traders to disregard the ensuing volatility.
Berkshire launched outcomes forward of its first in-person annual shareholder assembly since 2019 in Omaha.
In its quarterly report, Berkshire alluded to the Ukraine invasion, with out mentioning it particularly, and the unfold of Omicron variants of COVID-19 in discussing the provision chain points that many companies now face.
“Important disruptions of provide chains and better prices have continued in 2022,” it stated. “Additional, the event of geopolitical conflicts in 2022 have contributed to disruptions of provide chains, leading to price will increase for commodities, items, and providers in lots of components of the world.”
Berkshire companies that took hits included Precision Castparts plane components, Clayton Properties cell properties and McLane meals distribution.
Chip shortages have been additionally an issue, dampening shopper transport quantity at BNSF and decreasing gross sales quantity at Berkshire Hathaway Automotive automotive dealerships.
Income nonetheless rose at each, with BNSF benefiting from larger gas costs and surcharges, and automotive and truck gross sales income rising as a result of automobiles are getting costlier.
Rising used automotive costs and shortages of alternative components additionally weighed on the Geico auto insurer, which posted an underwriting loss as a result of loss claims are rising.
Revenue from Berkshire Hathaway Vitality, one in every of Berkshire’s largest companies and a gentle earnings generator, rose 7%, helped by larger electrical utility margins and tax advantages at its MidAmerican Vitality unit.
Berkshire’s inventory has withstood latest market volatility much better than many different giant U.S. shares. Its Class A shares are up greater than 7% this yr, whereas the has fallen 13%.