Berkshire Hathaway Q1 operating earnings helped by manufacturing, retail (NYSE:BRK.B)

Berkshire Hathaway (BRK.A) (NYSE:BRK.B) Q1 operating earnings rose slightly from a year ago as its manufacturing and retail businesses thrived, but insurance underwriting earnings declined. The company that owns Geico, Precision Castparts, and furniture stores found opportunity to spend some of its mountain of cash.

The diversified insurance, industrial, and investment company built by Warren Buffet had cash and short-term securities holdings of ~$106.3B at March 31, 2021, down 28% from ~$146.7B at Dec. 31, 2021. (Added 8:30 AM ET)

The company used about $3.2B of its cash to buy back its common stock in the first quarter of 2022, less than the $6.9B of stock it repurchased in Q4 2021. That comes during a quarter in which the company built by Warren Buffett also made big purchases of Occidental (OXY) shares and $4.2B of HP Inc. (HPQ), as well as agreeing to buy Alleghany (Y) for $11.6B.

Berkshire Hathaway’s (BRK.B) filing also showed its stake in Chevron (CVX), with a fair value of $25.9B, has become one of its top four investments in other companies’ stock. (Added at 8:54 AM)

Q1 operating earnings of $7.04B vs. $7.29B in Q4 2021 and $7.02B in Q1 2021,

Insurance float was ~$148B at March 31, 2022, up from ~147B at Dec. 31, 2021.

Operating earnings by segment vs. a year ago:

• Insurance underwriting — $47B vs. $764B
• Insurance -investment income — $1.17B vs. $1.21B
• Railroad — $1.37B vs. $1.25B
• Utilities and energy — $750M vs. $703M
• Manufacturing service and retailing — $3.03B vs. $2.62B
• Other — $677M vs. $473M

Q1 investment losses of $5.46B compared with gains of $4.69B in Q1 2021; that included losses of ~$771M in Q1 2022 and gains of ~$2.8B in Q1 due to changes of unrealized gains/losses in its equity security investment holdings. The total investment losses/gains numbers also include $612M of after-tax realized losses on sales of investments in Q1 2022 and after-tax realized gains on sales of investments of $1.41B in Q1 2021. (Added at 8:25 AM ET).

Q1 net earnings, which includes investment and derivatives gains or losses (most of which is unrealized), were $3.70B, or $2.47 per class B share. That compares with $39.6B, or $17.79 per class B share, in Q4 and $7.64B, or $5.09 per share, in the year-ago quarter.

Pandemic effects: COVID-19 continues to impact most of the company’s operating businesses, especially its insurance operations. At its GEICO unit, increases in claims severities continued compared against the year-ago quarter when the company experience lower claims frequencies for its passenger auto coverages.

Overall, Berkshire Hathaway (BRK.B) said supply chain disruptions and higher costs persisted in 2022 after the company experienced periodic temporary business closures and restrictions in 2021. The development of geopolitical conflicts added to supply chain disruptions, “resulting in cost increases for goods and services in many parts of the world.” (Added 8:44 AM ET)

Annual meeting’s investor Q&A gets underway at 10:15 AM ET.

SA contributor Another Mountain’s Rock Investing discusses Berkshire Hathaway’s (BRK.B) secret growth investment