Berkshire Hathaway Q1 earnings higher than expected

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Shareholders of Berkshire Hathaway, a Warren Buffett company, visit a fair during the company's annual shareholders meeting in Omaha, the United States, on May 4, 2019. [Photo/Xinhua]

U.S. multinational conglomerate Berkshire Hathaway Inc.'s operating earnings in the first quarter rose to 5.55 billion U.S. dollars from 5.29 billion dollars a year ago, according to the quarterly report released by the company on Saturday.

The first-quarter operating earnings, which do not include quarterly gains or losses from Berkshire's investments and derivatives portfolios, were higher than the 5.29 billion dollars expected by analysts.

Berkshire's pile of cash and cash equivalents, meanwhile, also increased. As of the end of the first quarter, the amount was 114.2 billion dollars, up from 111.9 billion dollars at the end of the previous quarter. During the first quarter, Berkshire repurchased 1.7 billion dollars' worth of class A and B shares.

Net earnings, which have become very volatile for Berkshire due to a change in accounting rule, stood at 21.7 billion dollars, or 13,209 dollars per A share and 8.81 dollars per B share.

The new accounting rule asks public companies to account for unrealized gains or losses in stocks when reporting their net income.

The first-quarter net earnings compared to a 1.1-billion-dollar loss in the same period last year. During that period, Berkshire benefited from a 15.1-billion-dollar unrealized gain on its stock portfolio.

Berkshire's first-quarter results, however, don't include the negative impact of food maker Kraft Heinz, which has faced investigation by the U.S. Securities and Exchange Commission into the company's alleged procurement mishandlings.

"As of May 3, 2019, Kraft Heinz has not filed its 2018 Form 10-K with the Securities and Exchange Commission. In addition, Kraft Heinz has not made its financial statements for the first quarter of 2019 available to Berkshire. Accordingly, Berkshire does not have the necessary financial information to determine its share of the earnings of Kraft Heinz for the first quarter of 2019. As a result, Berkshire's first quarter 2019 other operating earnings excludes such amount," Berkshire said in the first-quarter report.

Berkshire Chairman and CEO Warren Buffett told reporters Saturday at his company's annual shareholders' meeting that it's "pretty unusual" for a company to not have filed its 10-K yet.

Berkshire wrote off 2.7 billion dollars from its stake in Kraft Heinz in February in light of the Kraft Heinz disclosing a massive 15.4-billion-dollar write-down related to the SEC investigation.

Berkshire is Kraft Heinz's biggest shareholder, currently owning 325,442,152 shares of Kraft Heinz common stock, which represents 26.7 percent of the outstanding shares, according to the first-quarter report.

The fair value of Berkshire's investment in Kraft Heinz was approximately 10.6 billion dollars at the end of the first quarter, and 14.0 billion dollars at the end of the previous quarter, the report said.

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