Berkshire Hathaway's Q1 Net Income Drops 64% to $46.03 Billion

Berkshire Hathaway, the conglomerate led by Warren Buffett, released its first-quarter financial report ahead of the 2025 annual shareholders' meeting. The report revealed a significant decline in net income, which dropped by 64% to $46.03 billion, compared to $127.02 billion in the same period last year. This substantial decrease was primarily due to a $50.38 billion investment loss, which offset the company's overall performance.

The company's revenue for the quarter was $897.25 billion, a slight decrease from $898.69 billion in the previous year. The operating profit, a key metric closely watched by Buffett, stood at $96.41 billion, a 14% decline from $112.22 billion in the same period last year. This decrease was largely attributed to a 48.6% drop in underwriting profit from insurance operations, influenced by the impact of wildfires in California.

Berkshire Hathaway's investment activities during the quarter included the sale of securities worth $47 billion, generating an investment profit of $3.71 billion. However, the overall investment net loss for the quarter was $50.38 billion, a stark contrast to the $14.8 billion profit recorded in the same period last year. The company did not engage in any stock buybacks during the quarter, continuing a pause on this activity since the third quarter of 2024.

Despite the financial setbacks, Berkshire Hathaway's cash reserves reached an all-time high of $3477 billion by the end of the first quarter, up from $3342 billion at the end of the previous year. This substantial cash reserve has sparked discussions about the company's investment strategy and its plans for future acquisitions or investments. The company's equity investments are heavily concentrated in American Express, Apple, Bank of America, Chevron, and Coca-Cola, with significant holdings in Western Petroleum as well.

The financial report also highlighted the company's concerns about market uncertainties, noting that macroeconomic and geopolitical events are changing rapidly, making potential impacts difficult to predict. This cautious outlook reflects the company's strategy of maintaining a strong cash position to navigate through uncertain economic conditions.