Warren Buffett before Berkshire Hathaway's annual shareholders meeting in Omaha, Nebraska.
David A. Grosjean | CNBC
Berkshire Hathaway On Saturday, it reported a big rise in fourth-quarter operating profit, thanks to huge gains in its insurance business, while its cash pile expanded to record levels.
The Omaha-based group posted operating earnings — which refers to corporate profits across insurance, railroads and utilities — of $8.481 billion in the quarter ended December. This is 28% more than $6.625 billion compared to the same period last year.
For all of 2023, this brought operating profit to $37.350 billion, up 17% from $30.853 billion the year before.
Berkshire also held $167.6 billion in cash in the fourth quarter, a record high that exceeds the $157.2 billion the group held in the previous quarter.
Berkshire's Class A shares are up nearly 16% this year.
Berkshire Hathaway Class A shares
Geico, the auto insurance company considered Buffett's “favorite child,” reported a profitable year, with net underwriting profits reaching $5.428 billion in 2023. The earnings improvement was driven by higher premium rates and lower claims last year.
Meanwhile, Burlington Northern Santa Fe (BNSF) reported full-year net earnings of $5.087 billion last year, down 14% from $5.946 billion the year before.
Insurance underwriting rose to $848 million in the fourth quarter, up 430% from $160 million from the same period last year, boosting the group's operating profits.
Insurance investment income also rose to $2.759 billion on a quarterly basis, an increase of 37% from $2.0 billion in the same period of the previous year.
But operating profits from railroads fell in the fourth quarter, as did utilities and energy. Operating profits from the railroad fell to $1.355 billion, down from $1.469 billion last year. Utilities and energy operating profit fell to $632 million, down from $739 million the previous year.
Berkshire's total earnings, which include the company's investment gains from publicly traded companies, more than doubled during the quarter from the same period a year earlier, to $37.57 billion. For the full year, earnings totaled $96.22 billion.
However, the group has included the usual disclaimer advising investors to consider past fluctuations in quarterly results.
“We believe that investment gains and losses on investments in securities, whether realized from dispositions or unrealized from changes in market prices, are generally meaningless in understanding our periodic reported results or evaluating the economic performance of our operating businesses,” it said in a statement in annual report.
