News that Warren Buffett, the oracle of Omaha, is stepping down as CEO at year-end sent Berkshire Hathaway shares lower in early Monday stock market action. The 94-year-old Buffett will be succeeded by Greg Abel, vice chairman of noninsurance operations.
Presiding over his 60th annual meeting, Buffett said he would "still hang around and could conceivably be useful in a few cases."
Berkshire Hathaway Earnings
Berkshire's leadership transition overshadowed its first-quarter earnings report, which showed net earnings per Class B share sliding 64% to $2.13. Operating earnings fell 14% to $9.641 billion, while investments subtracted $5.04 billion from earnings amid equity declines.
Insurance-underwriting profits tumbled by 49% amid a $1.1 billion hit from the Southern California wildfires. Foreign currency exchange losses also hit operating earnings.
Berkshire's defensive quality makes it a relatively safe haven when growth stocks go wobbly. Berkshire's earnings cover both its investment income and its stable of operating companies, such as Geico, Duracell, Dairy Queen, Fruit of the Loom and railroad operator BNSF.
Buffett Is Net Seller Again
Berkshire was a net seller of stocks for a tenth-straight quarter — but just barely. Berkshire sold $4.677 billion worth of equities, while buying $3.183 billion worth. Net sales of $1.5 billion fell from about $17.3 billion in Q4.
Berkshire's cash hoard hit a record $347 billion vs. $334 billion at the end of Q4.
Berkshire's cash holdings equal about 32% of its $1.1 trillion market cap. Berkshire's portfolio moves for Q1 will be reported around May 15. During the final quarter of 2024, Berkshire sold several stocks including Bank of America. Apple is Berkshire's top holding.
Amid ongoing stock sales, Berkshire's ownership in equity securities moved down to $263.7 billion from $271.6 billion at the end of 2024 from $354 billion to $272 billion. Buffett wrote in his February annual shareholder letter that the value of Berkshire's non-quoted controlled equities "remains far greater than the value of the marketable portfolio."
Meanwhile, Berkshire Hathaway bought back none of its own shares for a third consecutive quarter.
BRKB
Berkshire stock dropped 6% in early trade, undercutting key technical support following earnings and the news of Buffett's pending retirement.
Shares finished up 1.8% on Friday to 539.80, an all-time closing high.
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