BERKSHIRE HATHAWAY INC. (10-Q)
Berkshire Hathaway Inc. reported its quarterly financial results for the period ended March 31, 2025. The company’s consolidated balance sheet showed total assets of $744.8 billion, total liabilities of $444.8 billion, and shareholders’ equity of $300 billion. The company’s consolidated statements of earnings reported net earnings of $12.4 billion, or $3,444 per Class A equivalent share, compared to net earnings of $11.7 billion, or $3,244 per Class A equivalent share, in the same period last year. The company’s cash and cash equivalents increased by $4.4 billion to $123.4 billion, and its investments in common stocks increased by $2.3 billion to $143.4 billion. The company’s management’s discussion and analysis of financial condition and results of operations highlights the company’s strong financial position, its ability to generate cash, and its investment in various businesses and investments.
Overview of Berkshire Hathaway’s Financial Performance
Berkshire Hathaway is a diversified conglomerate with a wide range of business operations, including insurance, railroads, utilities, manufacturing, service, and retailing. In the first quarter of 2025, Berkshire reported net earnings attributable to Berkshire shareholders of $4.6 billion, down significantly from $12.7 billion in the same period of 2024.
Revenue and Profit Trends
- Insurance underwriting earnings decreased $1.3 billion in Q1 2025 due to losses from the Southern California wildfires. Insurance investment income increased $295 million.
- BNSF’s after-tax earnings increased 6.2% in Q1 2025 due to higher volumes and improved operating efficiencies, despite weather impacts.
- Berkshire Hathaway Energy’s after-tax earnings increased 53.0% in Q1 2025, reflecting higher earnings from utilities and energy businesses.
- Manufacturing, service, and retailing businesses saw a slight decrease in after-tax earnings in Q1 2025, with most businesses experiencing lower revenues and earnings.
- Investment gains and losses, which are largely unrealized, caused significant volatility in Berkshire’s periodic earnings, resulting in a $5.0 billion after-tax loss in Q1 2025 compared to a $1.5 billion gain in Q1 2024.
Strengths and Weaknesses
Strengths:
- Berkshire maintains significant liquidity, with $328.0 billion in cash, cash equivalents, and U.S. Treasury Bills at the end of Q1 2025.
- The company’s diverse business operations and strong market positions in many industries provide stability and growth opportunities.
- Berkshire’s financial condition remains very strong, with shareholders’ equity of $654.5 billion at the end of Q1 2025.
Weaknesses:
- Berkshire’s earnings are subject to significant volatility due to the impact of investment gains and losses, which are largely unrealized.
- Some of Berkshire’s operating businesses, such as manufacturing and retailing, have experienced lower revenues and earnings due to macroeconomic and industry-specific challenges.
- The company’s large insurance operations are exposed to potential losses from catastrophic events, as evidenced by the significant losses from the Southern California wildfires in Q1 2025.
Outlook
Berkshire’s future performance will be affected by the ongoing impacts of macroeconomic and geopolitical events, as well as changes in industry or company-specific factors. The company faces considerable uncertainty regarding the potential impact of these events on its businesses, including changes in product costs, supply chain efficiency, and customer demand. It is reasonably possible that there could be adverse consequences on most, if not all, of Berkshire’s operating businesses, as well as on its investments in equity securities, which could significantly affect the company’s future results.
