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Berkshire Hathaway Reports Drop in Earnings, Driven by Investment Losses

Berkshire Hathaway, the insurance and investing conglomerate that is run by the billionaire and investment legend Warren E. Buffett, reported on Saturday a significant drop in earnings in the first quarter.

Profits at the company, which owns a diverse array of American brands from the car insurer Geico to the ice cream chain Dairy Queen, fell to $5.4 billion. That was down 53 percent from the nearly $12 billion that it earned in the same three months a year ago. Those profits were also lower than the $6 billion that analysts had expected the company would earn in the quarter.

Much of the drop, though, was driven by Berkshire’s large stock portfolio, which lost nearly $1.6 billion in the first three months of the year, down from a gain of nearly $5 billion in the first quarter of 2021. That drop mirrored the performance of the stock market in general, which had its worst month in two years in April, and has been dragged down by investors’ fears about rising inflation and uncertainty caused by the Ukrainian war and the pandemic’s lingering impact on global supply chains.

The earnings report came out as the company was holding its annual meeting in person for the first time since the beginning of the pandemic.

Dissident shareholders have put up a proposal for vote that asks Berkshire to overhaul how it views and details its climate risk, something Mr. Buffett has resisted doing. They say Berkshire Hathaway Energy, which manages a number of large utilities, has lagged rivals in lowering emissions. The climate proposal has the support of many larger shareholders outside of Mr. Buffett’s inner circle, including BlackRock, Vanguard and State Street.

What’s more, a number of large investors, including the giant California Public Employees Retirement Fund, are backing a shareholder proposal that would remove Mr. Buffett, who is currently both chief executive and chairman of the company’s board of directors, from his chair role. That proposal is one larger investors have floated at other companies as well, arguing that splitting the roles is better corporate governance. But the measure may hold a little more urgency among Berkshire’s shareholders because of Mr. Buffett’s age. He is currently the oldest C.E.O. in the S&P 500.

Mr. Buffett opposes both proposals and neither is expected to pass, in large part because Mr. Buffett owns and gets to vote nearly a third of Berkshire’s shares.

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