Warren Buffett’s Berkshire Hathaway Inc. Berkshire Hathaway Inc. on Saturday said quarterly operating income rose 14 per cent, aided by improved results from its insurance businesses, while soaring prices of stock holdings such as Apple Inc. led to a nearly US$36-billion overall profit.
Fourth-quarter operating income rose to US$5.02-billion, or approximately $3,252 per Class A share, from $4.42-billion, a year earlier.
Net income, reflecting the stock gains, rose 23 per cent to US$35.84-billion from $29.16 billion a year earlier.
For all of 2020, operating income fell 9 per cent to US$21.92 billion, while net income fell 48 per cent to $81.42 billion.
Berkshire, whose shares trailed the broader market over the last decade and significantly in 2019 and 2020, repurchased about US$9-billion of stock in the quarter, a sign Buffett considers his Omaha, Nebraska-based conglomerate undervalued.
For all of 2020, Berkshire said it bought back US$24.7-billion of its own stock, topping its old record $5-billion in 2019.
“At a discount of 40 per cent to intrinsic value, the repurchases looked extraordinarily compelling,” said Tom Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, a long-time Berkshire shareholder. “Repurchases capture forever the benefits of Berkshire’s businesses for the remaining shareholders.”
Berkshire stock has risen 4.8 per cent this year, beating the Standard & Poor’s 500’s 1.5 per cent gain.