Berkshire Hathaway (BRK.A) 2023 fourth quarter performance
Warren Buffett prior to Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | CNBC
Berkshire Hathaway On Saturday, the company reported a significant increase in fourth-quarter operating profit thanks to significant gains in its insurance business, while also boosting its cash reserves to record levels.
The Omaha-based conglomerate posted operating income of $8.481 billion in the quarter ending in December, which refers to profits from businesses across insurance, railroads and utilities. This is a 28% increase from $6.625 billion in the same period last year.
The overall operating profit in 2023 recorded $37.35 billion, a 17% increase from $30.853 billion the previous year.
Berkshire also had a record $167.6 billion in cash in the fourth quarter, surpassing the $157.2 billion the conglomerate held in the previous quarter.
Berkshire Class A shares are up about 16% this year.
Berkshire Hathaway Class A Shares
Auto insurer Geico, considered Buffett’s “favorite child,” reported a profitable year in 2023 with net underwriting revenue of $5.428 billion. The revenue improvement was driven by higher premiums and lower claims last year.
Meanwhile, Burlington Northern Santa Fe (BNSF) reported full-year net income of $5.087 billion last year, down 14% from $5.946 billion the year before.
Insurance underwriting in the fourth quarter surged 430% to $848 million from $160 million a year ago, driving operating profits for the conglomerate.
Insurance investment income also increased by 37% to $2.759 billion on a quarterly basis from $2 billion in the same period last year.
However, operating profits in the rail segment also declined in the fourth quarter, as did those in the utilities and energy segments. Railroad operating profit was $1.355 billion, down from $1.469 billion in the same period last year. Operating profit in the Utilities and Energy segment decreased to $632 million from $739 million a year earlier.
Berkshire’s overall revenue, including the company’s investment gains from publicly traded companies, more than doubled during the quarter compared to the same period a year ago, reaching $37.57 billion. Total profits for the year were $96.22 billion.
But the conglomerate included the usual disclaimer advising investors to look at historical fluctuations in quarterly results.
“We believe that investment gains and losses on investments in equity securities that are not realized on disposition or unrealized due to market price fluctuations are generally not meaningful in understanding our reported periodic results or in evaluating the economic performance of our operating businesses.” Annual report.
