Berkshire Hathaway Reports 14% Drop in Q1 Operating Earnings

Berkshire Hathaway reported a 14% decline in first-quarter operating earnings to $9.64 billion, marking its steepest drop since 2020. Net income also fell sharply to $4.6 billion, as the conglomerate pointed to significant investment losses and ongoing pressures from insurance claims related to events like the Southern California wildfires. The company highlighted 'considerable uncertainty' stemming from shifting international trade policies and tariffs, with management warning that the potential impacts on product costs, supply chains, and customer demand remain difficult to predict. Despite the earnings setback, Berkshire's cash reserves reached a record high of approximately $347 billion, underscoring its financial resilience. The results reflect broader challenges from macroeconomic and geopolitical developments, including currency fluctuations and a highly concentrated equity portfolio. Berkshire also noted that 69% of its portfolio's fair value is concentrated in five major companies, further exposing it to sector-specific risks.