10 Things About Berkshire Hathaway's 10-Q

With a bit from the annual shareholders meeting thrown in, too

(1) Berkshire Hathaway closed Q1 2026 with a cash position that almost defies comprehension: $380.2 billion. (I’ve historically used a narrower figure that excludes cash held in Railroad, Utilities, & Energy — but Greg Abel cited $380.2 billion at the annual meeting last weekend, so I will follow his lead.)

You don’t need me to tell you that is a lot of money.

This mounting cash total continues to be something that divides opinions. Critics view Berkshire’s decision-makers as either too cautious or too patient for their own good. That a cash pile this size, sitting largely in T-Bills, is a drag on returns. Every quarter it grows larger is another quarter that this capital isn’t compounding.

Others, though, value the unparalleled optionality that this cash affords Abel and co. to pounce on any future market dislocations.

Count me in as a member of the latter camp.

When Mr. Market panics — and he will panic — Berkshire won’t be scrambling for a credit line or selling stock to raise cash. It will be one of the very few entities on Earth capable of moving capital at scale, on short notice, without constraint.

Abel and Buffett have not seen the kind of opportunity that clears their high bar — and they haven’t bent under the pressure to pretend otherwise. When said opportunity finally arrives, the financial firepower will be ready, waiting, and willing.

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(2) One reason Berkshire’s cash keeps climbing: the conglomerate still isn’t buying back much of its own stock. When Abel appeared on CNBC in March and announced that he was restarting share repurchases after a nearly two-year hiatus, many investors — myself included — expected him to do so fairly aggressively. After all, the stock had mostly spun its wheels over the past year, cash was abundant, and Abel obviously felt that the value equation now tilted in favor of renewed repurchases.

But, as it turns out, Berkshire bought just $235 million of its own stock during the entire quarter. And almost all of it (~$225 million) came on March 4, the first day of the program. Which means that in the weeks that followed, as Berkshire’s stock price fell even further, the repurchases essentially stopped. Even the 10-Q filing admitted that the company had “acquired relatively minor amounts of treasury stock”.

The updated share count on the first page of the filing revealed that no further repurchases were made during the first two weeks of April, either.

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(3) Berkshire’s stock portfolio finished the quarter valued at $288 billion. And, as Abel noted at the annual meeting, it remains a very concentrated one. The five largest positions — Apple, American Express, Bank of America, Coca-Cola, and Chevron — represent 61% of the total, down modestly from 65% at year-end.

Or, looking at it another way, the Core Four (Apple, AmEx, Coke, and Moody’s) plus the Japanese investments account for roughly $185 billion on their own. Abel has signaled these are largely permanent holdings, which will not be tinkered with much in the future. On that note, Buffett also confirmed at the AGM that Apple remains Berkshire’s single largest equity position.

Overall, Berkshire was a net seller of stocks for the fourteenth consecutive quarter — with $15.9 billion coming in and $24.1 billion going out — but that figure may not tell the whole story. If recent reports are accurate that Berkshire liquidated the holdings previously managed by Todd Combs following his departure for JPMorgan Chase, that alone could account for the bulk of the selling. (Ted Weschler manages just under $20 billion, so Combs presumably ran a comparable sum.)

Without the (reported) one-time sale of a former employee’s portfolio, Berkshire would have actually been a net buyer last quarter by a pretty significant margin.

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(4) Operating earnings were always Warren Buffett and Charlie Munger’s preferred metric for evaluating Berkshire’s actual business performance. A number that cuts through the noise of unrealized gains and losses to reveal what the subsidiaries did — or did not — accomplish that quarter.

In Q1 2026, Berkshire reported $11.3 billion in operating earnings. Which, on its face, represents a 17.7% gain over the previous year — but probably needs an asterisk.

If you strip out the fluctuations from foreign currency exchange — removing this quarter’s $249 million “gain” and the $713 million “loss” in 2025 — the year-over-year operating earnings increase narrows to 7.2%. Which is still a very solid result.

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(5) Berkshire’s insurance operations have two core objectives: underwrite at a profit and grow float over time. And, in the first quarter, they did both.

After-tax underwriting earnings came in at $1.7 billion — up from $1.3 billion a year ago — on a sparkling combined ratio of 87.8%.

Float, meanwhile, edged up $500 million to $176.9 billion. And because Berkshire earned an underwriting profit, the cost of that float is effectively negative. The conglomerate is being paid to hold — and put to work — other people’s money.

Whether float grows or shrinks by $500 million in any given quarter is largely beside the point. The long arc matters much more — and that has consistently pointed in an upward direction. Case in point: Berkshire’s float has effectively doubled since 2015.

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(6) These underwriting results might seem difficult to square with Abel’s warning in his letter to shareholders that rising competition and falling rates would likely weigh on Berkshire’s insurance operations for some time. But he provided a simple explanation: Q1 2026 was essentially (and blessedly) catastrophe-free.

No significant loss events hit the books — in sharp contrast to Q1 2025, when California wildfires alone cost $860 million. Basically, the impressive headline number owes more to an absence of bad luck than to any improvement in the market cycle.

“We still see [insurance] as a softening market,” said Abel.

Still, a clean quarter is a clean quarter. And it’s never a bad thing to beat expectations in your first quarter as CEO.

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(7) GEICO posted an “exceptional” 87.3% combined ratio, though pre-tax earnings fell from $2.2 billion to $1.4 billion on higher losses and expenses. Policies-in-force grew 2% in the quarter, though that number pales in comparison to Progressive’s 11%.

That gap is now the main focus for GEICO. “It’s not going to be easy to just restart the growth engine,” said Abel. Doing so will require the Berkshire-owned auto insurer to retain existing customers while simultaneously spending to attract new ones.

GEICO spent years pulling back to fix a cost structure that had badly deteriorated. And it worked. But that retreat came at a cost — market share ceded to Progressive and others who kept their foot on the gas while GEICO focused on getting its house in order. Now, it must lean back into growth without undoing the discipline it worked so hard to rebuild. A narrow path, but one well worth taking.

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(8) BNSF Railway had a pretty strong quarter — growing earnings 13.4% to $1.4 billion — but more improvement is still on the menu. The railroad moved 2.2% more volume than a year ago, while operating with 260 fewer locomotives. That kind of efficiency gain (higher output with lower resources) allowed BNSF to increase its operating margin to 34.4%. It now ranks fourth among the six Class I railroads.

Progress… but not enough.

Abel told shareholders that “a step change” is still needed at BNSF to close the gap with Union Pacific and other Class I peers. UP just posted a 39.5% operating margin in the first quarter, while CSX (36.0%) and Canadian National (35.4%) also outpaced the Berkshire road.

Looking ahead, fuel prices present a double-edged sword for BNSF. Rising fuel costs make trucking more expensive, which tends to push shippers toward rail. Good news for BNSF’s bread-and-butter intermodal business. But if prices stay too high for too long, consumer spending and demand will weaken — and that would be a headwind across the entire railroad industry.

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(9) Berkshire Hathaway Energy eked out a 1.5% gain to $1.1 billion in earnings. Natural gas pipelines were the clear standout — up 24.2% — while U.S. utilities (-16.1%) and other energy businesses (-26.5%) both dropped.

Two larger storylines caught my eye:

• Abel discussed the surging demand for data center power infrastructure and made clear that Berkshire is interested — on its own terms. BHE will pursue data center buildouts, but only if the hyperscalers themselves bear the full cost of construction and ongoing operation. Existing utility customers will not subsidize these massive costs. It’s a disciplined framework that lets BHE participate in one of the most consequential infrastructure buildout cycles in decades without socializing the risk and cost across unrelated customers.

• As readers of this newsletter already know, the long-running wildfire litigation against BHE subsidiary PacifiCorp recently took a big turn in Berkshire’s favor. An appellate court found that the jury had been incorrectly instructed in how to apply evidence across all class members (despite some of the fires occurring more than 100 miles apart) and it was reversed and remanded accordingly. The circuit court has since stayed all remaining trials and ordered mediation. Abel called this an “exceptional outcome” and described the case as now being “back to first base”.

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(10) The sprawling Manufacturing, Service & Retailing segment delivered $3.2 billion in overall earnings. But, as always, it’s something of a mixed bag with so many different businesses and industries in play.

Some subsidiaries of note:

• Precision Castparts continued its comeback. Revenue came in at $2.9 billion, with growth across both aerospace and industrial gas turbine power products, and pre-tax earnings surged 32.9%. That comparison is somewhat flattered by costs from the SPS Technologies fire a year ago — but PCC is humming along.

• International Metalworking Companies (IMC) posted $1.2 billion in revenue and a 41.9% jump in pre-tax earnings, though the company itself cautioned that customers pulled purchases forward in the first quarter and this pace will not hold up through the rest of the year.

• New addition OxyChem generated $1.2 billion in revenue, but recorded a small pre-tax loss — a product of acquisition accounting amortization rather than any operational weakness. Abel clearly likes what he sees: “Their plants can’t be replicated,” he said. “We’ve got valuable assets [there].”

• Clayton Homes, which Abel called the “bellwether” of the Building Products group, saw pre-tax earnings fall 8.7% to $393 million.

  • The rest of the Building Products coterie suffered an earnings drop of 9.7% amid general housing weakness. Another reason for the decline is that Acme Brick was moved out of this segment and into Marmon at the start of the year.

• Brooks Running ranks as one of the quarter’s most compelling growth stories. (I did my part with a new pair of Ghost 17s.) North American sales rose 20%, while China — a market Brooks has been quietly and deliberately building — grew an extraordinary 136%. The brand even reached #1 in performance running footwear at U.S. specialty retail. “Our record quarter is proof our long-term strategy is resonating,” said CEO Dan Sheridan.

• Pilot remains complicated. The numbers still look pretty grisly, as pre-tax earnings declined $218 million to a $50 million loss, even as revenue rose $815 million on higher fuel prices. The forward-looking narrative at the travel center network is the capital campaign underway to modernize its aging store base. CEO Adam Wright told CNBC that Pilot has been investing $500-700 million annually in facility upgrades — and plans to maintain that pace through 2028 or 2029. “Right now,” said Wright, “about 26% of [our stores] are older than fifteen years. We want that under 10% by [the end of] that timeframe.”