Berkshire's earnings fall 64% of portfolio holdings as Buffett sells Apple – Winnipeg Free Press

OMAHA, Neb. (AP) – Berkshire Hathaway's first-quarter earnings fell along with the paper value of its investments, but the company said Saturday that most of the businesses it owns did well.

The company reported a profit of $12.7 billion, or $8.825 per Class A share, in the quarter. That's about a third of last year's $35.5 billion, or $24,377 per share.

The numbers were heavily impacted by a significant decline in the paper value of Berkshire's investments. Buffett urges investors to pay more attention to the conglomerate's operating income, excluding investment performance. Operating income rose 39 percent to $11.222 billion from $8.065 billion last year as its insurance businesses performed well.

First-quarter earnings per share were $7,796.47 per Class A share, beating the estimate of three FactSet Research analysts, who had forecast $6,701.87 per share.

During the quarter, Buffett was a net seller of $17 billion in stocks, including a roughly 13% reduction in Berkshire's Apple holdings. At $135.4 billion, the iPhone maker is still the largest share of Berkshire's $364 billion portfolio. Buffett said he expects that to be the case until his successor, Greg Abel, takes over.

The estimated value of Berkshire's Apple shares suggests that Buffett has sold more than 100 million shares. In the past, Buffett has said he invested in Apple stock because he believed consumers were loyal to the company's products, similar to Berkshire's beloved consumer brands like See's Candy.

Apple CEO Tim Cook, who was at the Berkshire meeting, told CNBC that he still sees Berkshire as a major shareholder as an advantage and that he knew about the sales before Berkshire announced them on Saturday.

Berkshire reported $2.6 billion in underwriting profits from its insurers, up from $911 million a year earlier, as Geico continued to improve its results. However, BNSF Railroad's revenue fell 8 percent to $1.143 billion.

Most of Berkshire's other companies posted strong results, including a 72% jump in operating profit in the utilities division, which added $717 million to Berkshire's total.

Revenue rose 5 percent to $89.87 billion in the quarter. Two analysts reporting to FactSet had forecast $87.044 billion.

With no major buybacks, Berkshire's cash pile rose to a record $188.993 billion in the first three months of the year, even after spending $2.6 billion on stock buybacks. An assortment of holdings, including Geico Insurance, BNSF Railroad, several major utilities and dozens of others, continue to generate cash.

“We want to spend it, but we're not going to spend it unless we do something with very little risk that makes us a lot of money,” Buffett said.