Berkshire Hathaway's cash reserves surged to a record high of $397 billion in Greg Abel's first quarter as CEO. The conglomerate said in a regulatory filing disclosing first-quarter results that its cash reserves increased significantly in the quarter, following a slight pullback at the end of last year, during which it reduced its equity holdings by a net $8.1 billion. At the end of the first quarter, Berkshire had about $380 billion in net cash on its books.
Abel, who succeeded legendary investor Warren Buffett as CEO this year, also restarted the stock repurchase plan, returning profits to shareholders again after more than a year. Berkshire spent $234.2 million repurchasing its own stock during the quarter.
The results underscore Abel's move to put his stamp of personal stewardship on Berkshire and are signs that some investors remain skeptical of the new chief executive. The trillion-dollar conglomerate has long outperformed the market, but its stock price has lagged the broader market significantly since Warren Buffett announced his retirement a year ago and handed management over to Abel.
Abel has previously said that he and Buffett both believed that the intrinsic value of the company's shares was higher than the current market value, so they decided to restart buybacks. Berkshire shares were down 5.9% for the year as of Friday's close.
The Omaha, Nebraska-based conglomerate said in a statement on Saturday that it had operating profits of $11.35 billion in the three months to the end of March, an increase of nearly 18% from the same period a year earlier.
Underwriting income from its insurance segment soared to US$1.7 billion, a year-on-year increase of about 29%; in the same period last year, the insurance business was under pressure due to losses related to the Los Angeles wildfires.
According to anonymous sources, Abel decided to reduce stock holdings previously managed by the company's former equity investment director Todd Coombs. JPMorgan Chase announced the hiring of Coombs in a general investment advisory role in December.