With narrow-moat-rated Berkshire Hathaway BRK.A/BRK.B reporting adjusted first-quarter results that were about in line with our expectations, we are leaving our USD 730,500 per Class A share and USD 487 per Class B share fair value estimates in place.
First-quarter reported revenue, including unrealized and realized gains/losses from Berkshire’s investments and derivatives portfolios, declined 9.2% year over year to USD 83.3 billion, as USD 6.4 billion in investment losses and other adjustments had an impact on the company. Excluding the impact of these investment losses and other adjustments, first-quarter operating revenue declined 0.2% to USD 89.7 billion.
Operating earnings, exclusive of the impact of investment losses and other adjustments, declined 14.1% year over year to USD 9.6 billion during the March quarter. While most of the company’s segments posted solid operating earnings growth, significant losses from the Southern California wildfires during the period hit the insurance business. When including the effects of the investment losses and other adjustments, reported operating earnings decreased 63.8% to USD 4.6 billion from USD 12.7 billion in the first quarter of 2024.
Book value per share, which still serves as a decent proxy for measuring changes to Berkshire’s intrinsic value, increased 0.8% sequentially and 14.4% year over year to USD 455,055 (from USD 451,507 and USD 397,627 at the end of December 2024 and March 2024, respectively).
The company ended the first quarter with a record USD 333.3 billion in cash and cash equivalents, up from USD 321.4 billion at the end of last year. Free cash flow reached USD 6.2 billion in the quarter, and the company sold on a net basis USD 1.5 billion of its stock holdings and once again did not repurchase any of its own shares. Berkshire, by our estimates, had around USD 292 billion in dry powder—money that could be committed to investments, acquisitions, and share repurchases—at the start of the second quarter of 2025.
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