BRKA Berkshire Hathaway Inc (class A)

By Anupreeta Das 

Longtime Democrat Warren Buffett doesn't sound that worried about the prospect of a President Donald Trump.

The chief executive of Berkshire Hathaway Inc. told shareholders Saturday that "Berkshire will continue to do fine" under an administration led by either Mr. Trump or Hillary Clinton. Both are their parties' front-runners in the current presidential campaign. Mr. Buffett has already endorsed Mrs. Clinton.

The country, he said, is headed in the right direction and "no presidential candidate or president is going to end it."

Concerns are mounting in boardrooms across the U.S. about the populist rhetoric dominating the Republican and Democratic races. Berkshire has large operations in several regulated industries, including insurance, energy and freight trains.

When asked Saturday if Mr. Trump would be a problem for Berkshire, Mr. Buffett quipped: Mr. Trump's impact on Berkshire "won't be the main problem," drawing laughter from the tens of thousands of shareholders gathered for Berkshire's annual meeting in Omaha, Neb. But then he played down the actual impact.

"We've operated under price controls, we've had 52% federal taxes applied to our earnings," he said. But "[in] the end, business in this country has done extraordinarily well for a couple hundred years. It has adapted to society and society has adapted to business."

Mr. Buffett and Berkshire Vice Chairman Charlie Munger were quizzed for more than five hours by shareholders as well as a panel of analysts and one of journalists. It gave the duo ample opportunity to air their pet themes and well-established views on everything from presidential politics and investment banking to Mr. Buffett's love of Cherry Coke.

"Removing your own beverage consumption from the equation, please explain directly why we Berkshire shareholders should be proud to own Coke?" a shareholder asked. Berkshire is Coca-Cola Co.'s largest shareholder, with a 9% stake valued at roughly $18 billion. Shareholders regularly point out the widely accepted negative health effects of sugar.

Mr. Buffett defended his Coke habit as well as the company, saying that he chooses to get his daily calories from "things that make me feel good when I eat them and that's my sole test." Those who contend that it is bad to ingest large amounts of calories from sugary drinks are making a "spurious" case, he said.

"I've not seen evidence that convinces me I'll be more likely to make it to 100 if I suddenly switched to water and broccoli," said Mr. Buffett, who gets 700 of his daily calories from fizzy drinks and often jests that he is one-quarter Coke.

Mr. Munger, a Diet Coke fan, was more blunt, calling it "immature and stupid" of people to "measure the detriment without considering the advantage."

For the first time, Berkshire streamed the Q&A over the web, hoping to attract a wider, global audience. Mr. Buffett earlier said he decided on the move after last's year record attendance of 44,000 strained the downtown Omaha venue's capacity. Tens of thousands of shareholders showed up in person, braving springtime rain and long lines before the doors opened early Saturday morning.

Shareholders slipped in and out of the main hall to shop for special-edition wares sold by many of Berkshire's more than 80 businesses, buying $1 Dilly Bars from Dairy Queen or $107 cuff links from Borsheims. Berkshire, a holding company with diverse operations, continues to grow and make large acquisitions.

Many Berkshire businesses set up booths inside a massive exhibition hall, selling or displaying their products. Companies such as Coke and Kraft Heinz Co., in which Berkshire owns large stakes, shared floor space with companies it owns fully, such as undergarment maker Fruit of the Loom and aircraft-components maker Precision Castparts Corp.

The billionaire spent much of this year's meeting dwelling largely on the basics of Berkshire's assorted businesses, from its railroad to its retailers. Mr. Buffett reported the conglomerate's first-quarter net income rose 8% to $5.6 billion, helped by a gain tied to the acquisition of Duracell from Procter & Gamble Co.

Earnings at its core railroad and insurance operations fell, leading to a drop in operating profit, which excludes the impact of certain investments. He said BNSF Railway Co., one of the biggest U.S. freight railroads, has been grappling with lower coal shipments that cut into earnings and revenue during the first quarter and would likely do so for the rest of 2016.

(END) Dow Jones Newswires

May 02, 2016 02:47 ET (06:47 GMT)

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