[ad_1]
Warren Buffett’s Berkshire Hathaway posted an increase in operating profit as higher interest rates and fewer catastrophes benefited the company’s insurance business.
The company reported fourth-quarter operating income of $8.48 billion, compared with $6.63 billion in the same period last year. The results were supported by a sharp rise in underwriting and investment income on the back of rising interest rates and mild weather. The company’s cash pile also set a new record of $167.6 billion, as the billionaire investor continued to face a lack of larger deals.
Berkshire’s earnings have always been looked at as an indicator of the health of the U.S. economy, given its vast footprint, from BNSF to Geico to Dairy Queen. That makes the company particularly vulnerable to rising interest rates that could dampen demand, and Buffett said last May that the company’s 2023 warned that profits would decline for most businesses.
“Our insurance business was extremely strong last year, setting records for sales, free float and underwriting profits,” Buffett said in the company’s annual letter to shareholders, released with the results Saturday. Stated. “We have a lot of room to grow.”
This is the first time Berkshire has announced financial results since Charlie Munger, Berkshire’s vice chairman and Buffett’s longtime investment partner, died in late November at the age of 99. Mr. Buffett spent much of his letter praising Mr. Munger’s role in the creation of this vast company.
Even though Berkshire’s acquisition machine has strengthened in recent years, the company still struggles to find many of the big-ticket deals that made Mr. Buffett’s reputation, and which Mr. Buffett and his investment representatives are quick to deploy. Buffett is left with more cash than he can afford.
After sitting idle during the pandemic, he bought out Occidental Petroleum Corp.’s stock and struck an $11.6 billion deal to acquire Alleghany Corp. Investors also added to Berkshire’s stakes in five Japanese trading companies after their profits soared last year. This spurred a rise in their stock prices. Buffett also continues to argue that stock buybacks will benefit shareholders in the absence of attractive alternatives.
Including investments and derivatives, Berkshire posted net income of $37.6 billion in the quarter, an increase from a year ago, helped in part by higher interest rates. Berkshire often advises investors to consider investment gains and losses related to accounting rules, which it says can be misleading.
In the absence of larger deals, Buffett continues to rely on stock buybacks, which he said will benefit shareholders. The company spent $2.2 billion on stock buybacks in the fourth quarter, bringing the annual total to about $9.2 billion.
The company reported fourth-quarter operating income of $8.48 billion, compared with $6.63 billion in the same period last year. The results were supported by a sharp rise in underwriting and investment income on the back of rising interest rates and mild weather. The company’s cash pile also set a new record of $167.6 billion, as the billionaire investor continued to face a lack of larger deals.
Expanding
Berkshire’s earnings have always been looked at as an indicator of the health of the U.S. economy, given its vast footprint, from BNSF to Geico to Dairy Queen. That makes the company particularly vulnerable to rising interest rates that could dampen demand, and Buffett said last May that the company’s 2023 warned that profits would decline for most businesses.
“Our insurance business was extremely strong last year, setting records for sales, free float and underwriting profits,” Buffett said in the company’s annual letter to shareholders, released with the results Saturday. Stated. “We have a lot of room to grow.”
This is the first time Berkshire has announced financial results since Charlie Munger, Berkshire’s vice chairman and Buffett’s longtime investment partner, died in late November at the age of 99. Mr. Buffett spent much of his letter praising Mr. Munger’s role in the creation of this vast company.
Even though Berkshire’s acquisition machine has strengthened in recent years, the company still struggles to find many of the big-ticket deals that made Mr. Buffett’s reputation, and which Mr. Buffett and his investment representatives are quick to deploy. Buffett is left with more cash than he can afford.
After sitting idle during the pandemic, he bought out Occidental Petroleum Corp.’s stock and struck an $11.6 billion deal to acquire Alleghany Corp. Investors also added to Berkshire’s stakes in five Japanese trading companies after their profits soared last year. This spurred a rise in their stock prices. Buffett also continues to argue that stock buybacks will benefit shareholders in the absence of attractive alternatives.
Expanding
In the absence of larger deals, Buffett continues to rely on stock buybacks, which he said will benefit shareholders. The company spent $2.2 billion on stock buybacks in the fourth quarter, bringing the annual total to about $9.2 billion.
[ad_2]
Source link
