Key Insights from Berkshire Hathaway's First-Quarter Financial Results:
Berkshire Hathaway, the multinational conglomerate led by Warren Buffett, ended the first quarter of 2022 with a decline in cash reserves and losses in stock investments, but saw gains in its operating businesses and a significant increase in its Apple stock position.
Despite a drop in cash reserves, from over $140 billion at the end of 2021 to $106 billion at the end of Q1 2022, Berkshire's operating businesses managed to earn a little over $7 billion for the first quarter, representing a slight gain over the same period in 2021.
One of the most notable moves by Berkshire in Q1 2022 was the acquisition of additional Apple shares, amounting to approximately 3.79 million shares and a 0.4% raise in their Apple holdings. The average closing price of Apple shares during this period was about $168.16, with prices ranging between $150.62 and $182.01. However, details about other specific stock acquisitions made in Q1 2022 are not yet publicly available.
Berkshire was also a net buyer of stocks for the first time in several quarters, deploying $51 billion into the stock market. The details of these acquisitions, other than the Apple shares, are expected to be revealed in Berkshire's Form 13-F filing, which is required to be submitted to the SEC within 45 days after the end of each calendar quarter and was publicly available starting May 16, 2022.
The first quarter of 2022 was a more challenging environment for Berkshire's insurance businesses. Underwriting profits from GEICO plunged compared to 2021, due to fewer cars on the road during the pandemic. This was partially offset by investment income, which remained strong.
Warren Buffett, Berkshire's chairman and CEO, noted during the in-person shareholder meeting in Omaha after a two-year hiatus that Berkshire's earnings should be understood differently than many public companies, focusing on the company's actual earnings. He also announced that Berkshire now owns a 9.5% stake in Activision Blizzard.
The potential investment in Activision Blizzard could be an arbitrage opportunity if regulators approve the video game company's sale to Microsoft. Berkshire Hathaway (BRK.A) and (BRK.B) reported a net income of $5.46 billion for the first quarter of 2022, compared to $11.71 billion in the same period of 2021. Berkshire spent about $3.1 billion buying back its own stock in the first quarter of 2022.
It's important to note that Berkshire's earnings report includes unrealized gains and losses from stock investments, which can significantly impact the reported figures. For instance, in Q1 2022, Berkshire's stock investments generally declined, resulting in a loss of $1.58 billion.
Some important developments in Berkshire's first quarter are not included in its earnings report, such as the large-scale purchases of Occidental Petroleum, HP, and Chevron. These details will likely be revealed in the upcoming Form 13-F filing.
In conclusion, while Berkshire Hathaway faced challenges in Q1 2022, particularly in its stock investments and insurance businesses, its operating businesses managed to earn a gain compared to the same period in 2021. The full picture of Berkshire's Q1 2022 activities, including the details of its stock portfolio, will be revealed in its Form 13-F filing, which was publicly available starting May 16, 2022.
Berkshire Hathaway increased its investment in Apple, purchasing approximately 3.79 million shares and boosting its holdings by 0.4%. (finance, investing, money)
Berkshire deployed $51 billion into the stock market in the first quarter of 2022, making it a net buyer of stocks for the first time in several quarters. (finance, investing, business)
Warren Buffett, the chairman and CEO of Berkshire Hathaway, announced that the company now owns a 9.5% stake in Activision Blizzard, potentially representing an arbitrage opportunity if the video game company's sale to Microsoft is approved. (finance, investing)
