Berkshire Hathaway President and CEO Warren Buffett plays the bridge after the annual Berkshire Hathaway shareholders’ meeting in 2019. Nati Harnick / The Associated Press
Warren Buffett’s Berkshire Hathaway Inc. Berkshire Hathaway Inc. said on Saturday that fourth-quarter profit increased, with gains in many of its businesses and common stock investments such as Apple Inc. Apple Inc. increased, and said annual earnings were at a record high. has reached.
Berkshire also indicated renewed confidence in its own stock, repurchasing US$6.9 billion in the quarter, and increasing its total buybacks to $27-billion in 2021. Buffett said Berkshire will repurchase another $1.2 billion of stock in 2022.
In his annual letter to Berkshire shareholders, Buffett said buybacks make “good sense” when options such as buying entire companies or more stock appear “unattractive.”
He also expressed confidence in Berkshire’s dozens of operating businesses, such as BNSF Railroad and Geico Auto Insurer, six years after a major takeover and allowing Berkshire’s cash stake to grow to $146.7-billion.
“Today, internal opportunities produce far better returns than acquisitions,” Buffett wrote.
Quarterly operating income rose 45 percent to $7.29 billion, or about $4,931 per Class A share, from $5.02 billion a year ago.
Insurance underwriting benefits, higher leverage from BNSF, and currency fluctuations benefited, among other factors.
Net income rose 11 percent to $39.65 billion from $35.84 billion, both totals reflecting big gains from stocks like Apple Inc. Apple alone represents 46 percent of the $350.7 billion in shares that Berkshire owns.
According to Refinitiv I/B/E/S, analysts’ average projected operating profit is $4,251 per Class A share.
Buffett considers net income a misleading performance measure because it includes gains and losses from stock holdings, regardless of what Berkshire buys or sells.
For all of 2021, operating income rose 25 percent to $27.46 billion, topping the previous record $24.78 billion in 2018, while net income more than doubled to $89.8 billion.
Berkshire’s stock price rose 30 percent in 2021, compared with a 29 percent gain in the Standard & Poor’s 500 including dividends, and ended two years of significant underperformance relative to that index. They are doing better in 2022 as well.