Berkshire Hathaway Inc. (BRK-B) Q1 2024 Earnings Analysis
Cashing In on Caution With $91.7B in Revenue
Key Takeaways
Berkshire Hathaway Inc. (BRK-B) reported Q1 2024 earnings with revenue of $91.7B, representing a -23.6% year-over-year change. The stock moved +1.1% on earnings day.
The bull case: Berkshire’s fortress balance sheet, best-in-class insurance and utility platforms, and disciplined capital allocation under Greg Abel position it to compound value steadily and opportunistically deploy massive cash into dislocations.
The bear case: Rising regulatory and legal risks in utilities and insurance, slower growth and margin pressure at key units like BNSF and GEICO, and a cautious stance on new technologies could translate into structurally lower returns and a persistent cash drag versus the broader market.
Financial Highlights
- Revenue: $91.7B (-23.6% YoY)
- Gross Profit: $36.6B (39.8% margin, -22.4% YoY)
- Operating Income: $15.7B (17.1% margin, -20.1% YoY)
- Net Income: $12.7B
- TTM Revenue: $410.9B
Stock Performance
- Earnings Day Move: +1.1%
- Year-to-Date: -0.6%
- 1-Year Return: -0.9%
- vs. S&P 500 (since earnings): -1.2%
- vs. Nasdaq (since earnings): +0.9%
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What Management Said
Here are the key debates and direct quotes from Berkshire Hathaway Inc.'s Q1 2024 earnings call:
Why Is Berkshire Trimming Its Apple Stake and Hoarding So Much Cash?
Sentiment: Positive
"We have sold shares, and I would say that at the end of the year, I would think it extremely likely that Apple is the largest common stock holding we have now… we own Coca-Cola, which is a wonderful business, and we own Apple, which is an even better business." — Warren Buffett
"We don’t use it now at 5.4%. But we wouldn’t use it if it was at 1%… We only swing at pitches we like… It’s just that things aren’t attractive, and there’s certain ways that can change, and we’ll see whether they do." — Warren Buffett
Sustainability and Regulatory Risk at Berkshire Hathaway Energy (BHE) and PacifiCorp
Sentiment: Mixed
"We’re not going to throw good money after bad in the field… Whether you earn x or go broke is not an equation that works… somebody’s going to put up many, many hundreds of billions, maybe in the trillions… and we would be certainly good for 100 billion or more, but we’re not going to throw good money after bad." — Warren Buffett
"Fundamentally, as we go forward, we need both legislative and regulatory reform across the PacifiCorp states if we’re going to deploy incremental capital… Utah… is the actual gold standard as we go forward… but the risk of regulatory compacts not being respected is a much broader one that we will always evaluate." — Greg Abel
Capital Allocation, Succession, and Who Controls the Stock Portfolio After Buffett
Sentiment: Positive
"If I were on that board and were making the decision, I would probably, knowing Greg, I would just leave… the capital allocation to Greg… if you understand businesses, you understand common stocks." — Warren Buffett
"The capital allocation principles that Berkshire lives by today will continue to survive… we’re going to [support] our operating businesses… always looking at potentially new businesses… and we’ll obviously continue to always put excess cash in the safest investment there is in US Treasuries, knowing we want to maintain that fortress of a balance sheet." — Greg Abel
GEICO vs. Progressive: Data Analytics, Competitiveness, and Berkshire’s “Hands-Off” Model
Sentiment: Mixed
"One of the drawbacks that GEICO is faced with, it hasn’t been doing as good a job as matching rate with risk… we are still behind… but… by the end of ’25, we should be able to be along with the best of players when it comes to data analytics." — Ajit Jain
"Progressive has done a better job [at] that recently. But our fundamental advantage at GEICO… is that we have lower costs than virtually anybody… we’ve driven our underwriting expense ratio below 10%… So it’s not a threat to survival, it’s not a threat to even profitability… but we would like to be growing." — Warren Buffett
BNSF’s Underperformance vs. Other Class I Rails and the Path to Margin Repair
Sentiment: Mixed
"If you look back… UP, which is our main competitor, fell way behind 20 or 25 years ago… It wouldn’t have been the end of the world at all if we bought the Union Pacific… but we had the opportunity to buy BNSF, and it’s been good for them, and it’s been good for us." — Warren Buffett
"If you go back to 2021… we were making excellent progress… [but] in ’23… we did not reset our cost structure… we have to look at our rail yards… our locomotive fleet… our employee resources… our team’s 100% committed to driving to the right cost structure." — Greg Abel
Bull Case
Berkshire’s fortress balance sheet, best-in-class insurance and utility platforms, and disciplined capital allocation under Greg Abel position it to compound value steadily and opportunistically deploy massive cash into dislocations.
Bear Case
Rising regulatory and legal risks in utilities and insurance, slower growth and margin pressure at key units like BNSF and GEICO, and a cautious stance on new technologies could translate into structurally lower returns and a persistent cash drag versus the broader market.
Looking Ahead
With revenue declining -23.6% year-over-year, investors will be watching for signs of a turnaround at Berkshire Hathaway Inc., particularly around why Is Berkshire Trimming Its Apple Stake and Hoarding So Much Cash?. With operating margins at 17.1%, margin trends will remain a focal point. The muted stock reaction on earnings day suggests the market is taking a wait-and-see approach, and the next earnings report will be a key catalyst for the stock.
Frequently Asked Questions
What was Berkshire Hathaway Inc.'s revenue in Q1 2024?
Berkshire Hathaway Inc. reported Q1 2024 revenue of $91.7B, representing a -23.6% year-over-year change.
Did Berkshire Hathaway Inc. beat earnings expectations in Q1 2024?
The stock moved +1.1% on earnings day, suggesting the results were roughly in line with market expectations. The current bull case centers on: Berkshire’s fortress balance sheet, best-in-class insurance and utility platforms, and disciplined capital allocation under Greg Abel position it to compound value steadily and opportunistically deploy massive cash into dislocations.
What is the bull case for BRK-B stock?
The bull case for BRK-B centers on: Berkshire’s fortress balance sheet, best-in-class insurance and utility platforms, and disciplined capital allocation under Greg Abel position it to compound value steadily and opportunistically deploy massive cash into dislocations.
What is the bear case for BRK-B stock?
The bear case for BRK-B centers on: Rising regulatory and legal risks in utilities and insurance, slower growth and margin pressure at key units like BNSF and GEICO, and a cautious stance on new technologies could translate into structurally lower returns and a persistent cash drag versus the broader market.
How has BRK-B stock performed since its Q1 2024 earnings?
BRK-B moved +1.1% on the day of its Q1 2024 earnings report, underperforming the S&P 500 by +1.2% since earnings. Year-to-date, the stock has returned -0.6%.
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