TLDR
- Berkshire Hathaway posted Q1 operating earnings of $11.35 billion, up 18% year-over-year
- Cash hoard hit a record $397.38 billion as the company struggles to find suitable acquisitions
- New CEO Greg Abel — who replaced Warren Buffett in January — said he will deploy capital deliberately
- Insurance profit rose 4% to $4.4 billion; BNSF rail profit climbed 13% to $1.38 billion
- Morningstar maintains a fair value estimate of $765,000 per Class A share, rating the stock four stars
Berkshire Hathaway posted Q1 operating earnings of $11.35 billion on Saturday, up 18% from $9.64 billion a year ago. It was the first earnings report under new CEO Greg Abel, who took over from Warren Buffett at the start of 2026.
Berkshire Hathaway Inc., BRK-B
The results came in line with Morningstar analyst Greggory Warren’s expectations. Morningstar kept its fair value estimate at $765,000 per Class A share ($510 per Class B) and maintained a four-star rating, calling the stock moderately undervalued.
Berkshire’s stock has fallen roughly 6% this year, underperforming the broader market.
The company’s cash pile grew to a record $397.38 billion, up from prior quarters, as Berkshire continued to find few acquisitions that met its value standards. The company bought back $234 million of its own stock during Q1 — its first buybacks since May 2024 — but made no repurchases in the first two weeks of April.
Adjusted operating revenue rose 4.4% year-over-year to $93.7 billion. Book value per share climbed 11.1% year-over-year to $505,723.
Abel used the annual shareholder meeting on Saturday to address concerns about deploying that enormous cash pile.
“There will be dislocations in markets that will allow us to act,” he said, adding that Berkshire maintains a shortlist of acquisition targets it would pursue at the right price.
Buffett, attending in person, offered his endorsement of his successor. “Greg is doing everything I did and then some, and he’s doing it better in all cases,” Buffett said.
Insurance and Rail Lead the Way
Insurance operating profit rose 4% to $4.4 billion. That’s an improvement from a year ago, when Southern California wildfires hit reinsurance results. However, pre-tax underwriting profit at Geico dropped 35%, with higher accident claims and marketing costs both contributing to that decline.
BNSF railroad had a strong quarter, with profit up 13% to $1.38 billion. Demand for grain, petroleum fuels, oilseeds and meals drove the improvement. Morningstar flagged that BNSF still trails Union Pacific, with an operating ratio gap of around 425 basis points.
Berkshire Hathaway Energy edged up 2%, helped by strong natural gas pipeline revenue tied to cold weather demand. Wildfire litigation and potential legislation targeting renewable energy investments remain a watch item for the segment going forward.
Manufacturing, service and retail businesses posted a 5% profit increase to $3.2 billion, partly aided by the OxyChem acquisition, though margins faced pressure from higher costs.
Abel Sets the Tone on AI and Bureaucracy
On the topic of artificial intelligence, Abel said certain Berkshire operations — including BNSF — have started using AI tools to solve specific operational problems. He was clear that the company wouldn’t chase AI for its own sake.
“We’re not going to do AI for the sake of AI,” Abel said. “At this point in time, we’re using it to solve logical problems in our businesses.”
Abel also pushed back on the idea that Berkshire’s size would slow it down. “As a conglomerate, we live by the fact that we hate bureaucracy,” he said.
Morningstar’s Greggory Warren noted that Berkshire’s insurance pricing has normalized after several strong years, though Q1 underwriting results remained solid with no major catastrophe losses in the quarter.
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