Berkshire Hathaway Inc. News Release
- Berkshire Hathaway Inc. reports a notable increase in net earnings attributable to shareholders for the fourth quarter and full year of 2023 compared to 2022.
- The company's investment and derivative gains have significantly improved, contributing to the overall positive financial performance.
- Operating earnings for Berkshire Hathaway Inc. have also shown a substantial increase, reflecting a strong business performance.
- The press release emphasizes the use of non-GAAP financial measures to provide meaningful and transparent financial reporting to investors and the public.
- None.
Insights
The recent financial results reported by Berkshire Hathaway highlight significant net earnings for both the fourth quarter and full year of 2023, contrasting sharply with the net loss reported for the full year of 2022. These figures are primarily driven by substantial investment and derivative gains, which include a noteworthy unrealized gain in their equity security investments and a remeasurement gain from an acquisition. The substantial increase in net earnings per share for both Class A and Class B shares represents a considerable turnaround from the previous year's losses.
From a financial analysis standpoint, the volatility of investment gains and losses, as noted by Berkshire, suggests that operating earnings may provide a more stable measure of the company's performance. The reported increase in operating earnings year over year indicates an improved operational efficiency and profitability across Berkshire's diverse business segments. This is particularly evident in the insurance underwriting profits, which have shifted from a slight loss in 2022 to a significant gain in 2023.
Moreover, the repurchase of shares to the tune of approximately $9.2 billion in 2023 reflects management's confidence in the intrinsic value of the company, often seen as a positive signal to investors. The increase in insurance float also suggests growth in the insurance business, which is key for Berkshire's investment capacity.
Analysis of Berkshire Hathaway's performance within the context of the broader market reveals the impact of market conditions on investment portfolios. The substantial unrealized gains in 2023 contrast with the unrealized losses of the previous year, indicating a potential market recovery or successful adjustments in investment strategy. The disclosure of a $2.4 billion remeasurement gain related to the acquisition of more interest in Pilot Travel Centers underscores strategic business decisions that may influence future revenue streams.
The sector-specific performance, such as consistent earnings from the railroad segment and a notable increase in insurance-investment income, reflects resilience and adaptability in these industries. The utilities and energy sector showed a slight decrease in earnings, which may be attributed to fluctuating energy prices or operational challenges. Understanding these nuances is crucial for stakeholders to evaluate the sustainability of Berkshire's earnings and the potential impact of economic factors on its diverse portfolio.
The data presented by Berkshire Hathaway provides an opportunity to assess the economic implications of the company's performance. The significant earnings in a period following a net loss year suggest a robust recovery that may be partially reflective of broader economic trends. The reported foreign currency exchange losses related to non-U.S. Dollar denominated debt highlight the influence of global currency fluctuations on multinational corporations like Berkshire.
The increase in insurance float by $5 billion suggests an accumulation of capital that can be deployed for investments, enhancing the company's ability to leverage economic opportunities. This strategic positioning, coupled with the share repurchases, indicates a proactive approach to capital management that could play a pivotal role in Berkshire's long-term economic prospects amidst a dynamic financial landscape.
Earnings (losses) of Berkshire Hathaway Inc. and its consolidated subsidiaries for the fourth quarter and full year of 2023 and 2022 are summarized below. Earnings (losses) are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).
|
Fourth Quarter |
|
Full Year |
||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||
|
|
|
|
|
|||||||||
Net earnings (loss) attributable to Berkshire shareholders |
$ |
37,574 |
$ |
18,080 |
$ |
96,223 |
$ |
(22,759 |
) |
||||
Net earnings (loss) includes: |
|
|
|
|
|||||||||
Investment and derivative gains (losses) |
|
29,093 |
|
11,455 |
|
58,873 |
|
(53,612 |
) |
||||
Operating earnings |
|
8,481 |
|
6,625 |
|
37,350 |
|
30,853 |
|
||||
Net earnings (loss) attributable to Berkshire shareholders |
$ |
37,574 |
$ |
18,080 |
$ |
96,223 |
$ |
(22,759 |
) |
||||
Net earnings (loss) per average equivalent Class A Share |
$ |
26,043 |
$ |
12,355 |
$ |
66,412 |
$ |
(15,494 |
) |
||||
Net earnings (loss) per average equivalent Class B Share |
$ |
17.36 |
$ |
8.24 |
$ |
44.27 |
$ |
(10.33 |
) |
||||
Average equivalent Class A shares outstanding |
|
1,442,785 |
|
1,463,422 |
|
1,448,880 |
|
1,468,876 |
|
||||
Average equivalent Class B shares outstanding |
|
2,164,177,636 |
|
2,195,133,576 |
|
2,173,319,709 |
|
2,203,313,642 |
|
||||
Note: Per share amounts for the Class B shares are 1/1,500th of those shown for the Class A. |
Generally Accepted Accounting Principles (“GAAP”) require that we include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our earnings statements. In the table above, investment gains (losses) in 2023 include gains of
The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings (losses) per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.
An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).
|
Fourth Quarter |
|
Full Year |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
|
|
|
|
||||||||||||
Insurance-underwriting |
$ |
848 |
|
$ |
160 |
|
$ |
5,428 |
|
$ |
(30 |
) |
||||
Insurance-investment income |
|
2,759 |
|
|
2,000 |
|
|
9,567 |
|
|
6,484 |
|
||||
Railroad |
|
1,355 |
|
|
1,469 |
|
|
5,087 |
|
|
5,946 |
|
||||
Utilities and energy |
|
632 |
|
|
739 |
|
|
2,331 |
|
|
3,904 |
|
||||
Other businesses |
|
3,691 |
|
|
3,709 |
|
|
15,112 |
|
|
14,040 |
|
||||
Other* |
|
(804 |
) |
|
(1,452 |
) |
|
(175 |
) |
|
509 |
|
||||
Operating earnings |
$ |
8,481 |
|
$ |
6,625 |
|
$ |
37,350 |
|
$ |
30,853 |
|
||||
* |
Includes foreign currency exchange losses related to non- |
Approximately
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein.
Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information. That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses and impairments of goodwill and intangible assets.
Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process. Moreover, as previously described, under applicable GAAP accounting requirements, we are required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our periodic earnings statements. In sum, investment gains/losses for any particular period are not indicative of quarterly business performance.
About Berkshire
Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.
Cautionary Statement
Certain statements contained in this press release are “forward looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guaranties of future performance and actual results may differ materially from those forecasted.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240224643700/en/
Marc D.
402-346-1400
Source: Berkshire Hathaway Inc.
FAQ
What are the net earnings (loss) attributable to Berkshire shareholders for the fourth quarter and full year of 2023 and 2022?
What are the investment and derivative gains (losses) for Berkshire in 2023 and 2022?
What is the operating earnings breakdown for Berkshire Hathaway Inc. in the fourth quarter and full year of 2023 and 2022?
What is the significance of Berkshire's use of non-GAAP financial measures in the press release?
