Omaha, Nebraska – Berkshire Hathaway, the conglomerate helmed by renowned investor Warren Buffett, announced a significant increase in operating earnings in the fourth quarter. This surge was primarily attributed to remarkable gains in its insurance sector, which helped boost profits overall. As of the end of December, operating earnings reached $8.481 billion, marking a substantial 28% jump from the previous year’s $6.625 billion.
Throughout 2023, operating earnings for the conglomerate totaled $37.350 billion, showcasing a notable 17% increase from the prior year. Additionally, Berkshire reported a record high cash reserve of $167.6 billion in the fourth quarter, surpassing the $157.2 billion held in the previous quarter.
Buffett’s favorite child, Geico, the auto insurer under Berkshire’s umbrella, had a prosperous year with net underwriting earnings hitting $5.428 billion in 2023. The boost in earnings was fueled by premium rate hikes and decreased claims from the previous year. However, Burlington Northern Santa Fe (BNSF) saw a decline in full-year net earnings to $5.087 billion, a 14% decrease from the year prior.
An uptick in insurance underwriting to $848 million in the fourth quarter, soaring 430% from the year before, played a significant role in driving the conglomerate’s operating earnings. Additionally, insurance investment income rose to $2.759 billion on a quarterly basis, up 37% from the same period in the previous year.
While insurance and investment sectors saw growth, operating earnings from railroads and utilities experienced a decline in the fourth quarter. Railroad earnings dropped to $1.355 billion from $1.469 billion a year ago, while utilities and energy fell to $632 million from $739 million in the prior year.
Overall, Berkshire’s earnings, inclusive of investment gains from publicly traded companies, doubled during the quarter to $37.57 billion compared to the year before. For the entire year, overall profits stood at $96.22 billion. Despite these impressive figures, Berkshire emphasized the importance of looking beyond quarterly fluctuations in its performance evaluation.