Berkshire Hathaway Reports First Quarter 2021 Results

Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) traces its roots back to 1839 when a textile manufacturing company named Valley Falls Co. was founded by Oliver Chace. In 1929, Valley Falls merged with Berkshire Cotton Manufacturing Co., and the combined entity was renamed Berkshire Fine Spinning Associates. Warren Buffett, who was a lesser-known investor back then, started buying Berkshire’s stock in the 1960s. Buffett took full control of the company in 1965. Under his leadership, Berkshire became one of the world’s largest holding companies. It has stakes in numerous publicly listed companies, besides owning several businesses in insurance, railroad, power generation, and retail sectors.

The Omaha, Nebraska-based company recently announced its financial results for the first quarter. Berkshire reported earnings of $11.71 billion for the three months ended March 31, helped by a rebound in its insurance, transportation, and retail businesses. The company reported a massive loss of $49.7 billion in the comparable period of 2020, as the Covid-19 pandemic substantially reduced the value of its key equity investments.

Operating income in the quarter jumped 20 percent on a year-over-year basis to $7.018 billion. Moreover, revenue in the quarter came in at $64.6 billion, ahead of analysts’ average forecast of $63.66 billion. If we look at the performance of key segments, Berkshire’s insurance underwriting business posted earnings of $764 million, translating to a surge of more than two-folds from $363 million in the year-ago quarter. Comparatively, earnings from the railroad business rose 5.1 percent on a year-over-year basis.

Meanwhile, Berkshire repurchased $6.6 billion worth of its common stock during the first quarter, as compared to $9 billion in stock buybacks in the prior quarter.

Separately, CEO Warren Buffett indirectly disclosed in an interview that Greg Abel will be his successor. However, Buffett did not give any timeline for his retirement. Buffett said in a statement, “the directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning.” Greg is currently leading the company’s non-insurance business.

See also 12 most valuable insurance companies in the world.