Berkshire Hathaway Inc. BRK BRK on Saturday registered a solid increase in fourth-quarter operating earnings, driven by strength in its insurance businesses, both in underwriting and investment income.
The Omaha-based company’s quarterly operating earnings of $8.48 billion rose 28% from $6.63 billion in the year-ago quarter.
For the full year of 2023, operating earnings increased to $37.350 billion, up 21.06% from $30.853 billion in the prior year.
Approximately 79% of the aggregate fair value was concentrated in five companies, as of the end of 2023:
- American Express Company AXP – $28.4 billion
- Apple Inc. AAPL – $174.3 billion
- Bank Of America Corporation BAC – $34.8 billion
- Coca-Cola Company KO – $23.6 billion
- Chevron Corporation CVX – $18.8 billion
At year end, Berkshire owned 27.8% of Occidental Petroleum’s OXY common shares and owned warrants that, for more than five years, give the firm the option “to materially increase” its ownership at a fixed price, it said. Berkshire expects to maintain its investment in Occidental Petroleum indefinitely.
Q4 In Detail
In the fourth quarter, insurance underwriting generated earnings of $848 million versus $160 million year over year. Earnings from insurance investment income was $2.759 billion higher than $2 billion a year ago.
Approximately $2.2 billion was used to repurchase Berkshire shares during the fourth quarter, bringing the total for the year to approximately $9.2 billion.
On Dec. 31, 2023, insurance float (the net liabilities under insurance contracts) was approximately $169 billion, an increase of $5 billion since the year end of 2022.
The company reported fourth-quarter net earnings of $26,043 per average equivalent Class A share, higher than the $12,355 per share in the year-ago period.
The company registered net earnings of $17.36 per average equivalent Class B share, higher than the $ 8.24 per share year over year.
For the quarter, Berkshire’s total earnings, encompassing investment gains from publicly traded firms, surged more than twofold from the same period last year to $37.574 billion.
In the fourth quarter, Berkshire maintained a record cash position of $167.6 billion, exceeding the $157.2 billion held in the previous quarter, CNBC reported.
Berkshire expects to maintain its investment in Japanese trading houses Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo indefinitely.
“We increased our holdings in all five last year after Greg Abel and I made a trip to Tokyo to talk with their managements,” Warren Buffett, CEO of Berkshire, said in a letter.
In a touching homage to the late Charlie Munger, Buffett described Munger as the “architect” of the current Berkshire, likening himself to a “general contractor.”
“In a way his relationship with me was part older brother, part loving father,” Buffett added.
Buffett, 93, is one of the best-known fundamental investors in the world. Known as the “Oracle of Omaha,” he has a real-time net worth of $137.4 billion per Forbes.
Price Action: BRK/B shares closed higher by 0.5% to $417.22 on Friday; shares were up by 0.08% to $417.56 after hours.
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