Omaha, Nebraska – Berkshire Hathaway, the conglomerate led by renowned investor Warren Buffett, reported a significant increase in operating earnings in the fourth quarter. This boost was primarily driven by strong performance in its insurance business, which saw substantial gains. Additionally, the company’s cash reserves reached a record level during this period.
For the quarter ending in December, Berkshire Hathaway posted operating earnings of $8.481 billion, marking a 28% increase from the previous year. This positive trend extended throughout the full year, with operating earnings reaching $37.350 billion, up 17% from the prior year. The conglomerate’s cash holdings also surged to $167.6 billion in the fourth quarter, setting a new record for the company.
Despite the challenging economic conditions, Berkshire Hathaway’s Class A shares experienced a notable 16% rally throughout the year. Key subsidiaries within the conglomerate also contributed to its overall performance. Geico, a prominent auto insurer known as Buffett’s “favorite child,” reported robust net underwriting earnings of $5.428 billion in 2023, driven by rate increases and lower claims.
On the other hand, Burlington Northern Santa Fe (BNSF), the company’s railroad subsidiary, saw a 14% drop in full-year net earnings, falling to $5.087 billion. While the insurance sector showed impressive growth, operating earnings from railroads and utilities experienced declines in the fourth quarter. Operating earnings from railroads dropped to $1.355 billion, down from $1.469 billion in the previous year, while utilities and energy earnings fell to $632 million from $739 million.
Overall, Berkshire Hathaway’s earnings more than doubled during the quarter from the year before, reaching $37.57 billion. For the full year, the conglomerate reported total profits of $96.22 billion. Despite these impressive figures, the company emphasized the importance of looking beyond short-term fluctuations in quarterly results, urging investors to focus on the long-term performance of its operating businesses.