Berkshire Hathaway's 4Q Profit Gains on Improving Economy

Berkshire Hathaway's 4Q Profit Up 10%
Nati Harnik/APBerkshire Hathaway Chairman and CEO Warren Buffett.
By JOSH FUNK

OMAHA, Neb. -- Warren Buffett's company said Saturday that fourth-quarter earnings rose 10 percent to nearly $5 billion as its insurance, rail and energy businesses generated major gains in the improving economy.

Berkshire Hathaway's insurance companies, which include Geico and General Reinsurance, reported a $394 million underwriting profit for the final three months of 2013, compared with a $19 million loss a year earlier. The Omaha, Neb., company also benefited from the strong performance of its non-insurance companies including BNSF railroad and electric utility MidAmerican Energy.

Berkshire Hathaway (BRK-A) (BRK-B) owns roughly 80 subsidiaries, including railroad, clothing, furniture and jewelry firms. Its insurance and utility businesses typically account for more than half of the company's net income. The company also has major investments in such companies as Coca-Cola (KO), IBM (IBM) and Wells Fargo (WFC), and last year bought NV Energy and a major stake in H.J. Heinz.

Berkshire's fourth-quarter report and Buffett's annual letter to shareholders released Saturday show the company doesn't face any significant business issues in the coming year, said author and investor Jeff Matthews, who wrote "Warren Buffett's Successor: Who It Is and Why It Matters."

"Life is good at Berkshire Hathaway," Matthews said Saturday.

Quarterly net income rose to $4.99 billion on revenue of $47.05 billion from $4.55 billion on revenue of $44.72 billion in 2012.
Buffett has said he thinks operating earnings are a better measure of how Berkshire is performing because they aren't affected by swings in the paper value of investments and derivatives. Operating earnings, which exclude investments and derivatives, grew to $3.78 billion, or $2,297 per Class A share.

Berkshire earned $19.48 billion for 2013 on total revenue of $182.15 billion. That's up from $14.82 billion in profit and revenue of $162.46 billion in 2012. Strong gains in the value of its investments and derivative contracts added $4.3 billion to the results, up from $2.2 billion the previous year. That included gains Berkshire recorded last fall as it redeemed warrants for General Electric (GE) and Goldman Sachs (GS) stock and Mars and Wrigley repaid Berkshire for an investment made during the financial crisis.


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k4jlp

-- Warren Buffett's company said Saturday that fourth-quarter earnings rose 10 percent to nearly $5 billion as its insurance, rail and energy businesses generated major gains in the improving economy.
What this means is the energy industry is doing well via the Commodity Market scams and excuses to jack the price of crude/gasoline. The rail industry is doing well because of higher diesel fuel prices forcing shippers to rail. The insurance industry is doing well because of higher deductables increasing their profits. You call that an "improving economy"???? Yes, for the rich people only.

March 03 2014 at 8:46 AM Report abuse +2 rate up rate down Reply
k4jlp

Show me proof of an "improving economy" with a independent trucker who has had to park his rig because he can't affored 4 buck/gallon for fuel and repair his rig.

March 03 2014 at 8:23 AM Report abuse +1 rate up rate down Reply
k4jlp

Show me proof of an "improving economy" with our elderly sitting in their chairs in a cold freezing room because they don't have the money to re-fill their propane or heating oil tanks.

March 03 2014 at 8:21 AM Report abuse +1 rate up rate down Reply
k4jlp

Show me proof of an "improving economy" for the average American making 30 grand or less a year and trying to feed his or her family, pay medical, energy and insurance bills.

March 03 2014 at 7:14 AM Report abuse rate up rate down Reply
k4jlp

My point exactly. More and more income squeezed out working folks pockets INTO the energy, insurance and healthcare scammers. What a perfect game set up by them. Control the supply of energy to control the supply. Remember this, you can only squeeze a bubble so far before it burst. When it does burst, you may not like what's inside.

March 02 2014 at 1:40 PM Report abuse -1 rate up rate down Reply
1 reply to k4jlp's comment
k4jlp

correction: that should read "control the supply to control the pricing". If you don't think there is money to be made in insurance, just open the yellow pages and look under "insurance". Why are there so many?

March 02 2014 at 1:42 PM Report abuse -1 rate up rate down Reply
1 reply to k4jlp's comment
k4jlp

Competition does not matter when they all get together and agree to charge the same and deny the same claims. They all monitor each others pricing daily. Why do you think the first thing they ask you when you call for a quote is "who is your carrier now"? And of course if you let your insurance expire, they charge you much much more and try to make you feel like you have commited murder.

March 03 2014 at 6:56 AM Report abuse rate up rate down
k4jlp

I ask all of you, how much is enough?

March 02 2014 at 9:15 AM Report abuse -1 rate up rate down Reply
1 reply to k4jlp's comment
k4jlp

Mr. Dick,
If I were running an insurance company what changes would I make? Your kidding right? The answer is NONE.

March 03 2014 at 10:05 AM Report abuse rate up rate down Reply
k4jlp

All the while our elderly have to decide between food, meds or heat for their homes...only in America. What a shame that we have to go down this road in the name of CAPITALISM......Congress, I hope you open your eyes before it's to late.

March 02 2014 at 7:37 AM Report abuse -1 rate up rate down Reply
Art Faucett

More propagand from the Huffington embarrassment. The economy is getting worse, and they are faking unemploymenty daya. The actual rate is in the 14-18 range, but they aren't counting people who run out of benefits. This President is the biggest piece ot s h i t since they started electing them to office.

March 02 2014 at 1:40 AM Report abuse +1 rate up rate down Reply