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Berkshire Hathaway’s profit drops by 64% due to changes in portfolio holdings, attributed to Warren Buffett’s sale of Apple shares

2024 Shareholder Meeting (Via Harry Anderson/Getty Images)

Berkshire Hathaway saw a significant drop in first-quarter profits due to declines in the value of its investments on paper, though the company noted on Saturday that its businesses owned outright performed well.

The company reported a profit of $12.7 billion, or $8.825 per Class A share, for the quarter. This is about one-third of the $35.5 billion, or $24,377 per A share, reported last year.

The decline in profit was largely impacted by the decreased value of Berkshire’s investments. Warren Buffett advises investors to focus more on the company’s operating earnings, which exclude these investment fluctuations. Operating earnings rose 39% to $11.222 billion from $8.065 billion last year, driven by strong performances from its insurance businesses.

Warren Buffett (Via Elise Moody/Shutterstock)

On a per share basis, this year’s first quarter operating earnings amounted to $7,796.47 per Class A share, surpassing estimates by analysts from FactSet Research, who had predicted $6,701.87 per Class A share.

During the quarter, Buffett sold $17 billion worth of stocks, reducing Berkshire’s substantial Apple stake by about 13%. Despite this reduction, Apple remains the largest holding in Berkshire’s $364 billion portfolio, valued at $135.4 billion. Buffett expects Apple to remain a significant part of Berkshire’s investments even after his successor Greg Abel takes over.

The estimated sale of more than 100 million Apple shares reflects Buffett’s strategy. He initially invested in Apple due to the strong loyalty of its consumers, similar to the appeal of consumer brands like Berkshire’s See’s Candy.

Apple CEO Tim Cook, present at Berkshire’s meeting, expressed gratitude for Berkshire’s continued major shareholder status. He was aware of the sales before Berkshire publicly disclosed them on Saturday.

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