(MENAFN) During the first quarter, Berkshire Hathaway, led by American investor Warren Buffett, made significant adjustments to its investment portfolio, reducing its stake in Apple. This strategic move resulted in the company's cash reserves soaring to an all-time high of USD189 billion. Despite the reduction in its holdings, Berkshire Hathaway reported record operating profits exceeding USD11 billion for the quarter.
The surge in operating profits can be attributed to the company's insurance sector, which saw improved underwriting operations and higher investment income driven by rising interest rates. However, Berkshire Hathaway's stake in Apple experienced a decline in value, dropping by 22 percent to USD135.4 billion as of March 31st, compared to USD174.3 billion at the close of 2023. Interestingly, this decrease occurred despite Apple's share price only falling by 11 percent during the quarter.
Analysis suggests that Berkshire Hathaway sold approximately 13 percent of its shares in Apple during the first quarter, reducing its holdings to around 790 million shares. Despite the adjustments in its investment portfolio, Berkshire Hathaway reported a 39 percent increase in operating profits to USD11.22 billion, compared to USD8.07 billion in the same period last year.
However, the company's net income experienced a significant decline, plummeting by 64 percent to USD12.7 billion from USD35.5 billion in the previous year. Despite this decrease, the insurance sector of Berkshire Hathaway saw a notable uptick in profits, rising by 80 percent to USD5.2 billion during the first quarter.
Overall, Berkshire Hathaway's strategic maneuvers in the first quarter, including the reduction in its stake in Apple, reflect Warren Buffett's prudent approach to portfolio management in response to market conditions and investment opportunities. Despite the decline in net income, the company's robust operating profits and substantial cash reserves position it well for future investments and strategic initiatives.
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