BRK-B · 10-Q · 2026Q1 · Full report
Raw material cost inflation (IMC)
BERKSHIRE HATHAWAY INC · 2026-05-04 · Importance 77 · Surprise 82 · In source text
IMC experienced significant raw material price increases beginning in 2025 and continuing through Q1 2026, contributing to revenue growth (approximately $1.2 billion, +20.6%) as customers accelerated purchases. IMC’s pre‑tax earnings rose 41.9% in Q1 2026 due to higher sales, improved gross margins and favorable fixed cost absorption, though higher raw material and selling expenses offset some gains. Management states the significant Q1 earnings increase is not expected to be sustained through the remainder of 2026 as raw material inflation and cost pressures persist. IMC operates globally with significant manufacturing in Israel and reported operations there have not been significantly impacted by regional conflicts.
Key facts
- IMC revenues were approximately $1.2 billion in Q1 2026, an increase of 20.6% versus 2025; IMC pre-tax earnings increased 41.9% in Q1 2026 versus 2025. source
- IMC experienced significant raw material price increases beginning in 2025 and continuing through Q1 2026; significant increases in raw material, energy and supply chain costs at Lubrizol during the latter part of Q1 2026 are expected to increase production costs in Q2 2026 and will necessitate selling price increases. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| revenue | positive | realized | — | IMC revenues were approximately $1.2 billion in Q1 2026, an increase of 20.6% versus 2025; IMC pre-tax earnings increased 41.9% in Q1 2026… |
| operating_income | positive | realized | — | IMC revenues were approximately $1.2 billion in Q1 2026, an increase of 20.6% versus 2025; IMC pre-tax earnings increased 41.9% in Q1 2026… |