4 Things We've Learned from Berkshire Hathaway's (BRK.B) Q1 Earnings

Business Insider

04-05-2025

It was a big weekend for Berkshire Hathaway (BRK.B). Not only did the company report its first-quarter 2025 earnings, but CEO Warren Buffett also announced plans to step down by the end of the year. Between the financial results and the leadership change, there's much to unpack about what the future holds for one of America's most iconic companies.
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Here are four big takeaways from Berkshire's Q1 earnings report, and what they tell us about where the company stands today, and where it's headed next.
It Was a Tough Quarter, but Not a Crisis
Berkshire reported net earnings of $4.6 billion, down 64% from $12.7 billion in the same quarter last year. Most of that drop was due to a $5 billion loss in its investment portfolio. However, Buffett has always said not to put too much weight on these figures since they include unrealized gains and losses that change with the market.
Operating earnings – a better measure of the company's businesses – fell 14% to $9.6 billion. Insurance underwriting took a hit, especially with $1.1 billion in wildfire-related claims. But other areas, like Berkshire Hathaway Energy, actually performed reasonably well, with energy earnings jumping 52% from a year ago.
The Cash Pile Keeps Growing
Even with a soft quarter, Berkshire's cash and short-term investments climbed to a record $347.7 billion. That's up $13 billion from a year ago.
Buffett didn't spend much of it. In fact, the company was a net seller of stocks for the tenth quarter in a row and didn't repurchase any shares. But he did reveal that Berkshire almost spent $10 billion recently on a deal that ultimately didn't go through. That's a clear sign that the company is looking to move when the timing is right.
Buffett Is Stepping Down, But Not Going Far
The biggest news from the annual shareholder meeting was Buffett's announcement that he plans to step down as CEO by the end of the year. Greg Abel is his chosen successor, and he oversees the company's non-insurance operations. Abel has been in line for years and already plays a key leadership role.
Buffett said he'll 'hang around' to help but won't run things daily. Importantly, he also said he's not selling any of his Berkshire shares. That should comfort investors as the company moves into its post-Buffett chapter.
The Future Looks Steady
Despite a rocky quarter, there's no panic in Omaha. Buffett downplayed recent market volatility and reiterated his belief in the strength of the U.S. economy. He criticized tariffs and large deficits but said he wouldn't be worried even if Berkshire's stock dropped 50%.
With steady leadership, a massive cash cushion, and a long-term mindset, Berkshire looks ready for whatever comes next, even with a new name at the top.
Is BRK.B Stock a Buy, Sell, or Hold?
average price target for BRK.B stock is $519.50. This reflects a 3.76% downside potential.