Berkshire Hathaway Inc.
swung to a quarterly profit on stock-market gains and better results from its insurance business.
Berkshire reported first-quarter net income of $11.7 billion, or $7,638 per Class A share equivalent, compared with a loss of $49.7 billion, or $30,653 per Class A share equivalent, in the year-earlier period.
Operating earnings, which exclude some investment results, rose to $7.02 billion from $5.87 billion in the year prior.
The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers, retailers and even auto dealerships. It also holds large investments, especially in the stock market. An accounting rule change in recent years has meant that Berkshire’s earnings often reflect the larger performance of the stock market, while operating earnings more accurately reflect the firm’s vast business operations.
Berkshire’s insurance-underwriting business had operating earnings of $764 million in the first quarter, up from $363 million a year ago. Insurance-investment income slipped to $1.21 billion, from $1.39 billion.
The company’s railroad, utilities and energy units earned $1.95 billion, up from $1.75 billion.
The U.S. stock market rose during the first quarter, buoyed by progress on the rollout of the coronavirus vaccines and expectations for a powerful recovery in the nation’s economy. Investors rotated into beaten-down sectors like finance and energy and out of technology stocks. And legions of individual investors plowed into so-called meme stocks such as
, spurring an unusual rally in those shares that ended abruptly in early February.
The major stock indexes closed the period near record highs. The S&P 500 climbed 5.8% in the quarter, while the Dow Jones Industrial Average rose 7.8%.
The markets were a far different place a year earlier, when fears over the virus’s spread gripped Wall Street and locked down parts of the economy. Government officials raced to intervene, steadying investors’ nerves with a series of programs that unclogged markets. By May, stocks were rallying again.
Mr. Buffett, who made some of the most-successful deals of his unparalleled career in turbulent times, largely sat out the early days of the pandemic. Berkshire’s biggest deal last year came in July, when the company agreed to buy Dominion Energy’s midstream energy business for $9.7 billion, including debt.
Berkshire was a big…
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