Berkshire Hathaway (BRK.A) earnings Q1 2025
Warren Buffett’s conglomerate, Berkshire Hathaway, recently released its first-quarter results, revealing a significant drop in operating earnings compared to the previous year. The company, known for its diverse portfolio of businesses including insurance, transportation, energy, and retail, also expressed concern about the potential impact of tariffs on its profits.
During the first quarter of this year, Berkshire’s operating earnings decreased by 14% to $9.64 billion, down from $11.22 billion in the same period last year. On a per-share basis, operating earnings stood at $4.47, a decline from $5.20 per class B share in the previous year. The decrease in earnings was primarily attributed to a 48.6% drop in insurance-underwriting profit, with losses totaling $1.34 billion due to the Southern California wildfires.
Additionally, Berkshire reported a loss of approximately $713 million related to foreign exchange fluctuations, compared to a gain of $597 million in the previous year. The weakening of the dollar in the first quarter contributed to this loss, with the dollar index falling nearly 4% and losing 4.6% against the Japanese yen.
The company also cited President Donald Trump’s tariffs and geopolitical risks as factors contributing to uncertainty in the business environment. Berkshire, which owns BNSF railway, Brooks Running, and Geico insurance, highlighted the challenges of predicting the impact of tariffs on its operations.
Berkshire’s cash reserves reached a new record high of over $347 billion in the first quarter, indicating that Buffett did not utilize the market downturn to invest the money. The company was a net seller of stocks for the tenth consecutive quarter, reflecting Buffett’s cautious approach to deploying capital.
Despite a 64% decline in overall earnings compared to the previous year, Berkshire emphasized the importance of looking beyond quarterly fluctuations in investment gains and losses. The company’s Class A shares have outperformed the S&P 500 this year, rising by nearly 19% while the broader market has experienced a 3.3% decline.
In conclusion, Berkshire Hathaway’s first-quarter results underscore the challenges posed by geopolitical uncertainties and market fluctuations. As Warren Buffett navigates these challenges, investors are advised to focus on the long-term performance of the company rather than short-term fluctuations in earnings.
