Berkshire Hathaway’s Q4 Earnings Report: A Complete Overview of the Numbers

Warren Buffett.

Yash Morwal | The Top Best Tip

Berkshire Hathaway, the multinational conglomerate holding company, experienced a decline in operating profits during the fourth quarter of 2022 due to inflationary pressures.

The conglomerate’s operating earnings amounted to $6.7 billion in the fourth quarter, which is 7.9% lower than the $7.285 billion recorded in the same period the previous year. Operating earnings represent the total profits from the businesses owned by the conglomerate.

Earnings from Berkshire’s railroad, utilities, and energy businesses amounted to $2.2 billion in the fourth quarter of 2022, slightly down from the year-ago period. Meanwhile, the firm’s insurance-underwriting business fell to $244 million in the fourth quarter of 2022, a decrease from $372 million in the year-earlier period.

Read Also: March into Profits: 100 Best Stocks to Buy Now

On the other hand, the conglomerate’s operating earnings for the year 2022 totaled $30.793 billion, up 12.2% from $27.455 billion in 2021.

In the fourth quarter of 2022, Berkshire used $2.855 billion to buy back shares, which is lower than the more than $6 billion in share repurchases in the year-earlier period but higher than the third quarter’s repurchase total of around $1 billion. Throughout the year, Berkshire bought back nearly $8 billion in common stock.

Despite this, Berkshire’s cash holdings increased to $128.651 billion in the fourth quarter of 2022 from nearly $109 billion in the third quarter.

In his annual shareholder letter, Warren Buffett, the CEO of Berkshire Hathaway, noted that the company would continue to hold a significant amount of cash and U.S. Treasury bills along with its myriad of businesses. He also specified that future CEOs in the company would have a significant portion of their net worth in Berkshire shares.

Despite the decline in operating profits during the fourth quarter of 2022, Berkshire Hathaway’s overall financial performance for the year remained strong. The conglomerate’s decision to repurchase shares and maintain significant cash reserves reflects its long-term investment strategy and commitment to creating shareholder value.

Stock chart icon

hide content

BRK in 2023

Berkshire Hathaway’s CEO, Warren Buffett, stated that the company will continue to avoid risky behavior that could result in cash flow issues, including financial panics and unprecedented insurance losses. The firm plans to retain earnings to ensure shareholders continue to save and prosper, with no finish line in sight.

Read Also: The Ultimate Guide for Immigrant Entrepreneur in the United States

The fourth quarter of 2022 saw a 54% decline in overall earnings to $18.164 billion, attributed to the company’s fluctuating equity investments. For the entire year, overall earnings plummeted 125% to a loss of $22.819 billion in 2022, down from $89.795 billion in 2021. These results reflect the turbulent 2022 market, with a $53.6 billion loss from investments and derivatives.

Buffett cautions against placing too much emphasis on the firm’s quarterly or annual earnings results, as the amount of investment gains and losses in any given period is usually meaningless and can provide misleading information to investors who are unfamiliar with accounting rules.

As of 2023, Berkshire shares have decreased by nearly 1.6%.

Related Keywords

  • Berkshire Hathaway

  • Operating profits

  • Fourth quarter

  • Inflationary pressures

  • Earnings

  • Railroad

  • Utilities

  • Energy businesses

  • Insurance-underwriting business

1 thought on “Berkshire Hathaway’s Q4 Earnings Report: A Complete Overview of the Numbers”

Leave a Comment