Berkshire Hathaway Inc. (BRK.A, BRK.B) disclosed a record $362.4 billion cash, U.S. Treasury and short-term bill position in its first-quarter 10-Q filing released Saturday morning, up $35 billion from the December 31 mark and the eighth consecutive quarter of cash-pile expansion. Operating earnings rose 4.2% year-on-year to $11.6 billion, modestly ahead of consensus, while net realized capital gains of $4.8 billion lifted GAAP earnings to $16.4 billion.
In his accompanying letter, Chairman Warren Buffett wrote that 'we currently find nothing of meaningful scale at prices that make sense to us' and reiterated that the elevated cash mix reflects 'discipline rather than market timing.' Net equity sales totaled $19.4 billion in the quarter — Berkshire's tenth consecutive quarter as a net seller — including the further trimming of the Apple Inc. (AAPL) position to 280 million shares from 300 million at year-end.
Apple Position Continues to Shrink
The continued AAPL trim — at an average price near $217 per share — reduced the position by 6.7% sequentially and now represents approximately $63 billion of fair value, or 19.4% of equity holdings. Buffett alluded to the rationale in the letter, citing 'capital-gains tax considerations at favorable rates that we do not expect to persist.' Bank of America (BAC) and Chevron (CVX) remained unchanged at 700 million and 122 million shares respectively. Berkshire took a new position in homebuilder Lennar (LEN) totaling 8.7 million shares, valued at $1.3 billion at quarter-end.