Berkshire Hathaway's Q4 operating earnings rose to $8.48 billion, driven by increased insurance underwriting earnings and investment income due to higher interest rates. Top holdings include Apple, Bank of America, Chevron, and Occidental Petroleum. Buffett praised late Charlie Munger's contribution.
Warren Buffett
, often hailed as one of history’s most successful investors, leads the conglomerate
Berkshire Hathaway
. The company recently disclosed its
earnings
for the fourth quarter, revealing an increase in operating earnings. The earnings rose to $8.48 billion, up from $6.63 billion during the same period the previous year. This increase was largely due to a surge in insurance underwriting earnings and
investment
income, facilitated by higher interest rates and less severe weather.
The company’s cash reserves also reached a new high of $167.6 billion, even as Buffett grappled with a lack of substantial deals.
Berkshire’s earnings are frequently used as an indicator of the health of the US economy due to the wide range of its businesses, which include BNSF railroad, Geico, and Dairy Queen. As a conglomerate owning several of America’s most renowned companies, Berkshire is particularly vulnerable to higher interest rates, which can suppress demand. In May of the previous year, Buffett cautioned that earnings across most of its operations would decline in 2023 as the US economy’s “incredible period” comes to a close.
iPhone maker made up 50.2% of Berkshire's portfolio
Berkshire Hathaway holds a significant stake in Apple, one of the largest technology stocks. The company first acquired
Apple
shares in the first quarter of 2016. From the beginning of that year to February 14 of the current year, the leading FAANG stock has soared 599%. In 2022, the company revealed that the cost of this stake was just over $31 billion. The investment has proven to be highly profitable, with Berkshire’s 5.9% stake in Apple valued at approximately $174 billion at the end of the year, according to a recent filing with the Securities and Exchange Commission.
The top ten holdings in Berkshire’s investment portfolio include Apple, Bank of America (BAC), Chevron, and Occidental Petroleum. Despite Berkshire Hathaway selling some of its substantial Apple holdings in the fourth quarter of 2023, the iPhone manufacturer still constituted 50.2% of Berkshire’s portfolio at the end of December, compared to 50% at the end of September.
Warren Buffett's annual letter
This is the first time Berkshire has reported earnings since the passing of Charlie Munger, Berkshire’s vice chairman and Buffett’s long-time investment partner, who died at the age of 99 in late November. Buffett dedicated a significant portion of his annual letter to praising Munger’s contribution to the development of the expansive company.
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