WASHINGTON: Warren Buffett's Berkshire Hathaway Inc on Saturday said fourth-quarter profit swelled, boosted by gains in many of its businesses and common stock investments such as Apple Inc, and said annual earnings reached a record high.
Berkshire also signaled renewed confidence in its own stock, repurchasing $6.9 billion in the quarter, and boosting total buybacks in 2021 to a record $27 billion.
But the pace of buybacks has slowed, with Berkshire, whose share price is just 2% below its record high, repurchasing just $1.2 billion of stock in 2022.
In his annual letter to Berkshire shareholders, Buffett said buybacks make "good sense" when alternatives such as buying whole companies or more stocks appear "unattractive." He also expressed confidence in Berkshire's dozens of operating businesses such as the BNSF railroad and Geico auto insurer, after having gone six years since a major acquisition and letting Berkshire's cash stake swell to $146.7 billion.
"Today, internal opportunities deliver far better returns than acquisitions," Buffett wrote.
Quarterly operating income rose 45% to $7.29 billion, or approximately $4,931 per Class A share, from $5.02 billion a year earlier.
Analysts on average expected operating profit of $4,251 per Class A share, according to Refinitiv.
"Overall results looked good," said Cathy Seifert, an analyst at CFRA Research with a "hold" rating for Berkshire. "Many industrial and consumer businesses benefited from the tailwind of an economic recovery.
She said 2022 could be tougher for top-line and margin growth because of inflationary pressure, including higher fuel and other input costs, and geopolitical pressure." For all of 2021, operating income rose 25% to $27.46 billion, topping the previous record $24.78 billion set in 2018.
Net income more than doubled to $89.8 billion, aided by the stock prices of Berkshire's largest stock investments — Apple, Bank of America Corp and American Express Co — which each rose by more than one-third.
Buffett considers net income a misleading performance measure because it includes gains and losses from stock holdings, regardless of what Berkshire buys or sells. — Reuters
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