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Berkshire Hathaway (NYSE:BRK.B) got off to a shaky start in 2025, posting first-quarter operating earnings of $9.64 billiondown 14% from last yearas insurance losses and market swings took their toll.
Revenue held up at $89.7 billion, slipping just 0.2%, but net earnings plunged to $4.6 billion from $12.7 billion in Q1 2024 thanks to a hefty $5 billion investment loss versus a $1.5 billion gain a year earlier. That works out to $3,200 a share for Class A and $2.13 for Class B, compared with $8,825 and $5.88 in Q1 2024.
Under the hood, insurance underwriting profit fell to $1.34 billion from $2.60 billion amid higher catastrophe claims, though insurance investment income held steady at $2.89 billion.
BNSF Railway chipped in $1.21 billionslightly ahead of last yearwhile Berkshire Hathaway Energy jumped 53% to $1.10 billion, thanks to strong utility rates and renewables. The manufacturing, service and retail group was flat at $3.06 billion, and the other bucket slid to just $41 million from $1.08 billion as float income dipped.
Cash remains king at Berkshire: the company ended the quarter with a staggering $347.7 billion in cash, equivalents and short-term securities. Warren Buffett (Trades, Portfolio) and Greg Abel say they're patiently sifting through potential deals, eyeing specialty insurance and industrial tuck-insbecause with that much dry powder, you can afford to wait for the right bargain.
Why should you care? This quarter shows the flip side of Berkshire's model: insurance float and railroad cash flow bring stability, but big swings in investment returns and underwriting losses can shake the bottom line. Keep your ears open for upcoming results, where a clean underwriting quarter or a surprise acquisition could spark a comeback for BRK shares after this subdued start.
This article first appeared on GuruFocus.