Berkshire Hathaway’s operating earnings decreased in the fourth quarter as inflationary pressures weighed on the conglomerate’s operations.
According to a press statement issued by Berkshire Hathaway, its operational earnings totalled $6.7 billion in the fourth quarter of 2022. This is a 7.9% decrease from the previous year, when earnings reached $7.285 billion. Operational earnings refer to the entire profits earned by the businesses controlled by the conglomerate.
Profits from Berkshire’s railroad, utilities, and energy operations totaled $2.2 billion in the fourth quarter of 2022, a modest decrease from the previous year. Nevertheless, the company’s insurance-underwriting business dropped to $244 million in the fourth quarter of 2022, down from $372 million the previous year.
The conglomerate’s operational earnings for the year was $30.793 billion. This is a 12.2% increase from $27.455 billion in 2021.
In the fourth quarter, Berkshire spent $2.855 billion on share repurchases. This is less than the previous year’s buyback total of more than $6 billion, but higher than the third-quarter repurchase total of roughly $1 billion. Berkshire Hathaway repurchased roughly $8 billion in common shares last year.
Despite this, Berkshire Hathaway’s cash reserves increased to $128.651 billion in the fourth quarter of 2022. This is an increase from roughly $109 billion in the third quarter.
Total earnings fell 54% to $18.164 billion in the fourth quarter of 2022, compared to the same quarter the previous year. Berkshire Hathaway’s earnings reflect the company’s varying equity interests.
Overall earnings fell 125% year on year to a loss of $22.819 billion in 2022, down from $89.795 billion in 2021. That sum is mostly a consequence of volatile 2022 market, with the corporation reporting a $53.6 billion loss from investments and derivatives.
In 2023 so far, Berkshire shares are down approximately 1.6%.