Warren Buffett’s Berkshire Hathaway returned to profitability in the first quarter of this year after reporting a nearly $50 billion loss during the first quarter of 2020 due to the Covid-19 pandemic.
Berkshire Hathaway, a sprawling conglomerate that owns companies ranging from the Geico insurance giant and Burlington Northern Santa Fe railroad to well-known consumer brands like Dairy Queen, Benjamin Moore paints and Duracell batteries, posted a net profit of $11.7 billion and operating profit (the metric Buffett prefers to highlight) of $7 billion.
Berkshire Hathaway said in a filing with the Securities and Exchange Commission Saturday that revenue for many of its manufacturing, services and retailing businesses “experienced significant recoveries in revenues and earnings” over the past few months as the economy has reopened.
But despite this optimism, Berkshire Hathaway also continued to plow money into buying back its own stock as opposed to using cash to do more acquisitions.
Berkshire Hathaway spent nearly $6.6 billion to repurchase the more expensive Class A shares as well as the more affordable Class B stock in the quarter.
Even after those stock purchases, Berkshire’s massive cash pile has grown. It now has about $145.4 billion in cash on its balance sheet, up from $138.3 billion at the end of 2020.
One Berkshire A share, which has never split its stock, is now trading at $412,500. The B shares, which do split in order to be more affordable for average investors, closed at a price of just under $275 on Friday.
Berkshire’s two classes of stock have both rebounded with the broader market this year. They are each up nearly 20% so far in 2021.
Still, some investing experts wonder if Buffett has lost his magic touch. Berkshire, despite making bets on top tech stocks like Apple and Amazon during the past few years, has lagged the broader market as of late.
Berkshire Hathaway stock is up about 90% in the past five years while the S&P 500 has more than doubled and the Nasdaq has soared nearly 200%.
Buffett, along with Berkshire vice chairmen Charlie Munger, Ajit Jain and Greg Abel, will talk more about the stock market rebound and economy as well as a host of other issues later Saturday when the company hosts its annual shareholder meeting.
The meeting, which will be held in Los Angeles instead of Berkshire’s hometown of Omaha, Nebraska, will be a virtual event for the second straight year due to Covid-19 and will be broadcast live on Yahoo Finance starting around 12:30 ET.