Berkshire Hathaway’s working income surged within the fourth quarter and for the total yr because the conglomerate’s companies continued to roar again to life from the pandemic financial slowdown. Chairman Warren Buffett elevated his guess on that comeback, shopping for again a file quantity of Berkshire shares in 2021.
The corporate’s working earnings — which embody income created from the myriad of companies owned by the conglomerate like insurance coverage, railroads and utilities — totaled $7.285 billion within the fourth quarter of 2021, based on an organization launch posted Saturday. That is up roughly 45% from the year-earlier interval’s revenue of $5.021 billion.
For the yr, Berkshire’s working earnings totaled $27.455 billion. That is up 25.2% from 2020’s $21.992 billion.
Berkshire used $6.9 billion to purchase again shares within the fourth quarter, bringing the whole in share repurchases to roughly $27 billion for 2021. That is a file quantity and up from the $24.7 billion repurchased because the pandemic raged in 2020. Nonetheless, the fourth-quarter buyback tempo was a bit slower than the $7.6 billion repurchased within the third quarter.
Regardless of these aggressive buybacks, Berkshire’s money hoard on the finish of 2021 stood at about $146.72 billion. That is down solely barely from a file $149.2 billion on the finish of the third quarter.
Buffett defined in his accompanying annual shareholder letter that he and Vice Chairman Charlie Munger discovered little that “excites” them when it comes to massive acquisitions that was as soon as their hallmark. As a substitute, the pair more and more finds share repurchases as one of the simplest ways to deploy money right now.
“Through that simple act, we increase your share of the many controlled and non-controlled businesses Berkshire owns,” Buffett wrote within the letter. “When the price/value equation is right, this path is the easiest and most certain way for us to increase your wealth.”
Total earnings, which mirror Berkshire’s fluctuating fairness investments, got here in at $39.646 billion for the quarter. That is up about 10% from the year-earlier interval of $35.835 billion.
Nonetheless, Berkshire tends to downplay the significance quarterly modifications within the firm’s funding beneficial properties or losses.
“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire stated.
Earnings from Berkshire’s railroad, utilities and power enterprise jumped 12.3% to $2.241 billion from $1.995 billion a yr earlier. In the meantime, Berkshire’s insurance-underwriting enterprise earned $372 million after shedding $299 million within the fourth quarter of 2020.
The earnings report got here as Berkshire’s B shares broke out to a file excessive this yr, up practically 7%.
Full-year total earnings got here in at $89.795 billion, greater than double 2020’s whole of $42.521 billion.