Buffett’s Berkshire Hathaway sees 64% drop in profit due to selling Apple stocks

Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, reported a significant drop in profits for the first quarter of the year. The company’s profits plummeted to $12.7 billion, down from last year’s $35.5 billion, largely due to a decrease in the paper value of its investments.

Despite the decline in profits, Berkshire Hathaway’s operating earnings actually saw a 39% increase to $11.222 billion, driven by strong results from its insurance companies. On a per share basis, the operating figure amounted to $7,796.47 per Class A share, surpassing analysts’ estimates.

Buffett was a net seller of $17 billion in stocks during the quarter, including reducing Berkshire’s stake in Apple by about 13%. However, Apple still remains the largest holding in Berkshire’s portfolio at $135.4 billion. Buffett expressed confidence in Apple’s future and expects it to remain a key investment even after his successor, Greg Abel, takes over.

Berkshire’s insurance business saw a significant underwriting profit of $2.6 billion, up from $911 million last year, while BNSF railroad’s profits dropped 8% to $1.143 billion. The company’s other businesses, including utilities, delivered solid results, contributing to a 5% increase in revenue to $89.87 billion.

With a record cash pile of $188.993 billion, Berkshire is on the lookout for investment opportunities that offer low risk and high returns. Buffett emphasized the company’s disciplined approach to deploying its cash reserves, stating, “We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money.”