Warren Buffett before Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | David A. Grogan CNBC
Berkshire Hathaway It reported Saturday that fourth-quarter operating profit surged on a surge in its insurance business, while cash reserves expanded to a record level.
The Omaha-based conglomerate reported operating profit (profit from its insurance, railroad and utility businesses) of $8.481 billion in the quarter ended in December. This is an increase of 28% from US$6.625 billion in the same period last year.
Full-year operating profit in 2023 will reach US$37.350 billion, an increase of 17% from US$30.853 billion in the previous year.
Berkshire also held $167.6 billion in cash in the fourth quarter, a record high, exceeding the $157.2 billion the group held in the previous quarter.
Berkshire’s Class A shares have gained about 16% this year.
Berkshire Hathaway A shares
Geico, Buffett’s “favorite child” auto insurance company, reported a profit in 2023, with net underwriting income of $5.428 billion. The improvement in earnings 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 previous year.
Insurance underwriting surged to US$848 million in the fourth quarter, a 430% surge from US$160 million in the same period last year, boosting the group’s operating profit.
Insurance investment income also increased quarterly to US$2.759 billion, an increase of 37% from US$2 billion in the same period last year.
But the rail division’s operating profit fell in the fourth quarter, as did the utilities and energy divisions. Railway operating profit fell to $1.355 billion from $1.469 billion a year ago. Utilities and energy segment operating profit fell to $632 million from $739 million last year.
Berkshire Hathaway’s overall profits, including the company’s investment income from public companies, more than doubled in the quarter compared with the same period last year, to $37.57 billion. Total profit for the year was US$96.22 billion.
However, the group included its usual disclaimer, advising investors to watch for fluctuations in quarterly results.
“We believe that investment gains and losses on investments in equity securities, whether realized through disposals or unrealized due to changes in market prices, are generally not meaningful in understanding our reported periodic results or in assessing the economic performance of our operating businesses,” wrote in a statement to the annual report.
