Berkshire Hathaway Chairman and CEO Warren Buffett.
Andrew Harnik | AP
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 wager 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, in line with 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 full 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 an alternative, the pair more and more finds share repurchases as one of the best ways to deploy money right now.
“Via that easy act, we improve your share of the various managed and non-controlled companies Berkshire owns,” Buffett wrote within the letter. “When the worth/worth equation is correct, this path is the best and most sure approach for us to extend your wealth.”
General 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 positive aspects or losses.
“The quantity of funding positive aspects/losses in any given quarter is often meaningless and delivers figures for web earnings per share that may be extraordinarily deceptive to traders who’ve little or no information of accounting guidelines,” Berkshire mentioned.
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 general earnings got here in at $89.795 billion, greater than double 2020’s whole of $42.521 billion.