Berkshire Hathaway Inc.BRK BRK witnessed a remarkable surge in operating earnings for the fourth quarter, attributed to the robust performance of its insurance divisions, both in underwriting and investment revenue.
The company’s Q4 operating earnings spiked by a notable 28% to $8.48 billion, compared to $6.63 billion in the corresponding quarter of the previous year.
For the entirety of 2023, operating earnings soared to $37.350 billion, marking a noteworthy increase of 21.06% from $30.853 billion in the preceding year.
By the close of 2023, approximately 79% of the total fair value was focused on five key companies, which included American Express Company, Apple Inc., Bank Of America Corporation, Coca-Cola Company, and Chevron Corporation.
At year end, Berkshire held a 27.8% stake in Occidental Petroleum’s common shares and maintained the option to enhance its ownership at a fixed price over an extended period.
Exploring Q4 Performance
During the fourth quarter, earnings from insurance underwriting reached $848 million, a substantial rise from $160 million in the previous year. Additionally, insurance investment income surged to $2.759 billion, up from $2 billion a year earlier.
Berkshire allocated approximately $2.2 billion for share repurchases in Q4, contributing to a total of around $9.2 billion in repurchases for the full year.
As of December 31, 2023, the insurance float stood at about $169 billion, reflecting a $5 billion increase from the end of 2022.
The company reported fourth-quarter net earnings of $26,043 per average equivalent Class A share, surpassing $12,355 per share in the same period a year earlier. Net earnings per average equivalent Class B share also exhibited growth to $17.36 from $8.24 year over year.
Berkshire’s total earnings for the quarter, inclusive of investment gains from publicly traded companies, leaped more than double from the corresponding period in the previous year to $37.574 billion.
By the end of Q4, Berkshire boasted a record cash reserve of $167.6 billion, exceeding the $157.2 billion held in the previous quarter, as reported by CNBC.
Berkshire remains committed to its investments in Japanese trading houses such as Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo, following an increase in holdings and a strategic discussion with their managements.
In a moving tribute to the late Charlie Munger, Warren Buffett described Munger as the “architect” of the current Berkshire, likening his own role to that of a “general contractor.” Buffett fondly added, “In a way his relationship with me was part older brother, part loving father.”
Buffett, a renowned figure in the world of fundamental investing often referred to as the “Oracle of Omaha,” currently holds a net worth valued at $137.4 billion, according to Forbes.
Price Action: BRK/B shares closed 0.5% higher at $417.22 on Friday, with an after-hours increase of 0.08% to $417.56.
Read Next: Charlie Munger’s ‘Sit On Your A– Investing’ Strategy Actually Works, Says Market Pro — With Artificial Intelligence
Photo: Shutterstock