Key Highlights
- Berkshire Hathaway delivered Q1 operating earnings of $11.35 billion, marking an 18% increase compared to the same period last year
- The company’s cash reserves reached an unprecedented $397.38 billion amid ongoing challenges in identifying attractive acquisition opportunities
- Greg Abel, who assumed the CEO role from Warren Buffett in January, emphasized a disciplined approach to capital allocation
- Insurance operations generated $4.4 billion in profit, representing a 4% gain, while BNSF railroad earnings increased 13% to $1.38 billion
- Morningstar analysts continue to value Class A shares at $765,000, assigning a four-star rating to the stock
Berkshire Hathaway delivered first-quarter operating earnings of $11.35 billion on Saturday, representing an 18% increase from the $9.64 billion reported in the corresponding quarter of the previous year. This marked the inaugural earnings release under Greg Abel’s leadership as CEO, following his succession of Warren Buffett at the beginning of 2026.
Berkshire Hathaway Inc., BRK-B
The financial performance aligned with projections from Morningstar analyst Greggory Warren. Morningstar preserved its fair value assessment of $765,000 for each Class A share ($510 for Class B shares) and retained its four-star rating, characterizing the stock as moderately undervalued.
Berkshire’s stock has declined approximately 6% year-to-date, trailing the performance of broader market indices.
The conglomerate’s cash position expanded to an all-time high of $397.38 billion, reflecting the ongoing difficulty in locating acquisitions that satisfy Berkshire’s stringent value criteria. During the first quarter, the company repurchased $234 million worth of its own shares — representing the first buyback activity since May 2024 — though no additional repurchases occurred during the opening two weeks of April.
Adjusted operating revenue increased 4.4% year-over-year to $93.7 billion. Book value per share advanced 11.1% compared to the prior year, reaching $505,723.
Abel addressed shareholder concerns regarding the deployment of Berkshire’s substantial cash reserves during Saturday’s annual meeting.
“There will be dislocations in markets that will allow us to act,” he stated, noting that Berkshire maintains a curated list of potential acquisition candidates it would pursue when pricing becomes favorable.
Buffett, who attended the meeting in person, expressed strong support for his successor. “Greg is doing everything I did and then some, and he’s doing it better in all cases,” Buffett remarked.
Insurance and Rail Operations Drive Performance
Insurance operating profit expanded 4% to reach $4.4 billion. This represents progress compared to the previous year, when reinsurance results suffered due to Southern California wildfire events. Geico, however, experienced a 35% decline in pre-tax underwriting profit, attributed to elevated accident claims and increased marketing expenditures.
BNSF railroad delivered robust quarterly results, with profit climbing 13% to $1.38 billion. The performance reflected increased demand across grain, petroleum fuels, oilseeds and meal transportation categories. Morningstar analysts observed that BNSF continues to lag behind Union Pacific, maintaining an operating ratio differential of approximately 425 basis points.
Berkshire Hathaway Energy recorded a modest 2% increase, supported by robust natural gas pipeline revenue linked to elevated cold weather demand. Ongoing wildfire litigation and potential legislative action targeting renewable energy investments remain areas requiring continued monitoring.
Manufacturing, service and retail operations posted a 5% profit gain to $3.2 billion, partially supported by the OxyChem acquisition, although margins experienced pressure from rising cost structures.
Abel Outlines Strategic Vision on Technology and Organizational Efficiency
Regarding artificial intelligence adoption, Abel explained that select Berkshire operations — BNSF among them — have begun implementing AI technologies to address specific operational challenges. He emphasized that the company maintains a practical, problem-solving approach to technology adoption.
“We’re not going to do AI for the sake of AI,” Abel explained. “At this point in time, we’re using it to solve logical problems in our businesses.”
Abel also addressed concerns about organizational efficiency at scale. “As a conglomerate, we live by the fact that we hate bureaucracy,” he stated.
Morningstar’s Greggory Warren observed that insurance pricing conditions have returned to more typical levels following several exceptional years, while Q1 underwriting results remained healthy in the absence of significant catastrophe losses during the period.
