Shares in Berkshire Hathaway (LONDON: BRK) jumped in premarket U.S. trading on Monday after Warren Buffett’s investment giant posted record income in 2023.
Omaha, Nebraska-based Berkshire reported an all-time high operating profit of $37.4 billion in 2023, buoyed in part by a 28% jump in fourth-quarter income to $8.48 billion.
Powering the gains were solid returns from Berkshire-owned auto insurer, where full-year net underwriting earnings came in at $5.43 billion. Elevated borrowing costs also helped generate $6.1 billion in interest income at the company’s insurance division, above the $5.5 billion it brought in from stock dividends.
In the fourth quarter, Berkshire, whose decisions are often closely watched by investors, was a net seller of stocks as Buffett struggled to find attractively priced deals. Berkshire’s cash pile swelled to a record $167.6 billion.
The 93-year-old Buffett, meanwhile, moved to reassure investors that Berkshire is “built to last” through even the worst financial disasters. He added that Greg Abel, Berkshire’s Vice Chairman and designated successor, was “in all respects ready to be CEO of Berkshire tomorrow.”
But in his closely-watched annual shareholder letter released over the weekend, Buffett noted that Berkshire’s share price will likely not see any “eye-popping” performances due to its already massive size. He said that only a handful of firms are capable of “moving the needle” at Berkshire, “and they have been endlessly picked over by us and by others.”
Buffett also took time to honour his long-time colleague Charlie Munger, who passed away in November at the age of 99. Buffett called him the “architect” of Berkshire.
