Berkshire Hathaway Shares Rise as Investors Cheer Earnings Beat and Geico’s Quick Turnaround
Berkshire Hathaway’s shares rose following a strong earnings report and Warren Buffett’s annual shareholder meeting, dubbed the “Woodstock for Capitalists.” The company’s A shares climbed 2% on Monday, reaching an intraday high of $502,055, and extending its year-to-date gains to over 6%.
For the first quarter, the conglomerate reported a 12.6% increase in operating earnings, driven by a recovery in its insurance business, particularly Geico, its auto insurance subsidiary. The segment returned to an underwriting profit of $703 million after suffering a $1.9 billion pretax underwriting loss in 2020 due to market share losses to competitor Progressive.
Berkshire’s earnings also benefited from gains in its equity portfolio, led by Apple. The company repurchased $4.4 billion worth of stock in the first quarter, the most since the first quarter of 2021, up from $2.8 billion at the end of last year.
Brian Meredith, a Berkshire analyst at UBS, raised full-year earnings estimates following the Q1 report and stated that the company’s shares remain an attractive play in an uncertain macro environment.
Geico’s Surprise Recovery
During the shareholder meeting, Ajit Jain, Berkshire’s vice chairman of insurance operations, mentioned that Geico is improving the use of telematics to collect clients’ driving data, such as mileage and speed, to help price policies. Jain revealed that around 90% of new businesses have a telematic input on pricing decisions.
