Berkshire Hathaway Chairman and CEO Warren Buffett.
Andrey Garnik | AP
Berkshire HathawayOperating profits rose in the fourth quarter and throughout the year as conglomerate businesses continued to recover after a slowdown in the pandemic recession. Chairman Warren Buffett has increased the stakes on this return by buying a record number of Berkshire shares in 2021.
The company’s operating profit – which includes revenue from many conglomerate-owned businesses such as insurance, railways and utilities – was $ 7.285 billion in the fourth quarter of 2021, the company said in a statement released Saturday. That’s about 45% more than the $ 5.021 billion profit for the previous period.
Berkshire’s operating income for the year was $ 27.455 billion. That’s 25.2% more than $ 21.992 billion in 2020.
Berkshire used $ 6.9 billion for share repurchases in the fourth quarter, bringing the total share repurchase to about $ 27 billion in 2021. That’s a record amount compared to the $ 24.7 billion redeemed during the 2020 pandemic. However, in the fourth quarter, the rate of redemption was slightly less than the $ 7.6 billion repurchased in the third quarter.
Despite these aggressive buyouts, Berkshire’s cash treasure at the end of 2021 was about $ 146.72 billion. That’s just a little less than a record $ 149.2 billion at the end of the third quarter.
Buffett explained in his accompaniment annual letter to the shareholder that he and Vice President Charlie Munger found little that “excites” them in terms of the great acquisitions that were once their hallmark. Instead, the couple increasingly sees share buybacks as the best way to deploy cash at the moment.
“Through this simple action, we are increasing your stake in the many controlled and uncontrolled businesses owned by Berkshire,” Buffett wrote in the letter. “If the price / value equation is correct, this path is for us the easiest and surest way to increase your wealth.”
Total revenue, reflecting fluctuating Berkshire equity investments, was $ 39.646 billion for the quarter. That’s about 10% more than $ 35.835 billion for the previous year.
However, Berkshire seeks to downplay the importance of quarterly changes in the company’s investment gains or losses.
“The amount of investment gains / losses in any quarter is usually meaningless and gives net earnings per share figures that can mislead investors who know little or no knowledge of accounting rules,” Berkshire said.
Berkshire’s rail, utility and energy revenues jumped 12.3% to $ 2.241 billion from $ 1.955 billion a year earlier. Meanwhile, Berkshire’s insurance business earned $ 372 million after losing $ 299 million in the fourth quarter of 2020.
The income statement came as Shares of Berkshire’s B broke to a record high this year, an increase of almost 7%.
Total revenue for the full year was $ 89.795 billion, more than double the total in 2020 of $ 42.521 billion.