Warren Buffett’s Berkshire Hathaway posts $35.5 billion profit, buys back more stock

Warren Buffett's Berkshire Hathaway Inc on Saturday said its first-quarter profit totaled $35.5 billion, reflecting gains from common stocks such as Apple Inc, while higher income from investments bolstered operating profit.

Net income equaled $24,377 per Class A share, and swelled from $5.58 billion, or $3,784 per share, a year earlier.

Quarterly operating profit increased 13% to $8.07 billion, or about $5,561 per Class A share, from $7.16 billion.

The Omaha, Nebraska-based company said it also repurchased $4.4 billion of its own stock in the quarter.

While Berkshire has a succession plan in place, with Vice Chairman Greg Abel slated to succeed Buffett as CEO, investors know that their time to see and hear Buffett and longtime Vice Chairman Charlie Munger is limited.

"Even though I've gone for 32 or 33 years, it's enjoyable, uplifting, and you're always learning something new," Paul Lountzis, who makes Berkshire his largest investment at Lountzis Asset Management LLC in Wyomissing, Pennsylvania.

"Charlie is 99 and Warren turns 93 on Aug. 30," Lountzis added, "and you just don't know how many more you're going to have."

Buffett and Munger are due to answer five hours of shareholder questions at the meeting. Abel, who oversees Berkshire's dozens of non-insurance businesses, and Vice Chairman Ajit Jain, who oversees insurance operations, will join in the morning.

Buffett says Berkshire’s operating earnings that exclude investments are a better measure of the company’s performance. By that measure, Berkshire’s operating earnings grew nearly 13% to $8.065 billion, up from $7.16 billion a year ago.

The quarterly report didn’t reveal any big new stock investments this year. But most of Berkshire’s eclectic mix of companies performed well despite the fears about the possibility of a looming recession.

Berkshire's insurance unit, which includes Geico and a number of large reinsurers, recorded a $911 million operating profit, up from $167 million last year, driven by a rebound in Geico's results. Geico benefitted from charging higher premiums and a reduction in advertising spending and claims.

But Berkshire BNSF railroad and its large utility unit did report lower profits. BNSF earned $1.25 billion, down from $1.37 billion, as the number of shipments it handled dropped 10% after it lost a big customer and imports slowed at the West Coast ports. The utility division added $416 million, down from last year's $775 million.

Besides, those major businesses, Berkshire owns an eclectic assortment of dozens of other businesses, including a number of retail and manufacturing firms such as See's Candy and Precision Castparts.

Berkshire again faces pressure from activist investors urging the company to do more to catalog its climate change risks in a companywide report. Shareholders were expected to brush that measure and all the other shareholder proposals aside Saturday afternoon because Buffett and the board oppose them, and Buffett controls more than 30% of the vote.