Warren Buffett ahead of the Berkshire Hathaway Annual Shareholder’s Meeting in Omaha, NE.
David A. Grogan | CNBC
Berkshire Hathaway on Saturday reported a giant rise in operating earnings within the fourth quarter, thanks to large gains in its insurance business, while its money pile expanded to record levels.
The Omaha-based conglomerate posted operating earnings — which refers to profits from businesses across insurance, railroads and utilities — of $8.481 billion within the quarter ending December. That is 28% above the $6.625 billion from the year-ago period.
For the total yr 2023, that brought operating earnings as much as $37.350 billion, up 17% from $30.853 billion within the prior yr.
Berkshire also held $167.6 billion in money within the fourth quarter, a record level that surpasses the $157.2 billion the conglomerate held within the prior quarter.
Berkshire Class A shares have rallied roughly 16% this yr.
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Berkshire Hathaway Class A shares
Geico, the auto insurer considered Buffett’s “favorite child,” reported a profitable yr, with net underwriting earnings of $5.428 billion in 2023. The improved earnings was driven by premium rate increases and lower claims last yr.
Meanwhile, Burlington Northern Santa Fe (BNSF) reported full-year net earnings of $5.087 billion last yr, a 14% drop from $5.946 billion within the prior yr.
Insurance underwriting surged to $848 million within the fourth quarter, spiking 430% from $160 million from the year-ago period, driving operating earnings for the conglomerate.
Insurance investment income also rose to $2.759 billion on a quarterly basis, up 37% from $2.0 billion in the identical period within the yr prior.
But operating earnings from railroads fell within the fourth quarter, because it did in utilities and energy. Operating earnings from railroads dropped to $1.355 billion, down from $1.469 billion a yr ago. Operating earnings for utilities and energy fell to $632 million, down from $739 million the prior yr.
Overall Berkshire earnings, which include the corporate’s investment gains from publicly traded corporations, greater than doubled in the course of the quarter from the year-earlier period, reaching $37.57 billion. For the total yr, overall profits got here in at $96.22 billion.
The conglomerate, nonetheless, included its usual disclaimer advising investors to look past fluctuations in quarterly results.
“We imagine that investment gains and losses on investments in equity securities, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses,” read an announcement within the annual report.