Warren Buffett's Berkshire Hathaway Sees Profit Rise 23%
February 27 2021 - 9:03AM
Dow Jones News
By Jenna Telesca
Berkshire Hathaway Inc.'s fourth-quarter profits rose on the
back of a soaring stock market.
Berkshire's net earnings rose to $35.8 billion, or $23,015 a
Class A share equivalent, up almost 23% from the year before's
profit of $29.2 billion, or $17,909 a share.
Operating earnings, which exclude some investment results, rose
to $5 billion from $4.4 billion the year prior. Billionaire
investor Warren Buffett has said operating earnings better reflect
Berkshire's performance than net earnings that incorporate
unrealized investment gains or losses.
Berkshire runs a large insurance operation as well as railroad
holdings, utilities, industrial manufacturers, retailers and even
auto dealerships. It also holds large investments, especially in
the stock market.
An accounting-rule change in recent years has meant that
Berkshire's earnings often reflect the larger performance of the
stock market.
Ninety-year-old Mr. Buffett has built his sprawling Omaha, Neb.,
conglomerate as a vehicle for investors interested in long-term
gains. As such, Berkshire operates a variety of different
businesses that Mr. Buffett thinks will stand the test of time. The
company also invests the "float" from the premiums its insurance
customers pay.
Berkshire's available cash and short-term Treasury bonds were
$138.3 billion in the fourth quarter. Investors have been watching
to see if Mr. Buffett would buy a significant stake in a large
company as he has in other turbulent times in the U.S. economy.
Despite the rising profit, Berkshire's stock performance fell
short of the broader market for a second year running. The S&P
500 index increased by 16.3% for the year ended Dec. 31 while
Berkshire's stock increased 2.4%. Berkshire's stock also lagged
behind the index in 2019.
(END) Dow Jones Newswires
February 27, 2021 08:48 ET (13:48 GMT)
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