Buffett's Berkshire Hathaway Reports Rise in Net Earnings

By Nicole Friedman Business Leaders Dow Jones Newswires

FILE - In this Aug. 1, 2016, file photo, Berkshire Hathaway Chairman and CEO Warren Buffett applauds at a rally for Democratic presidential candidate Hillary Clinton in Omaha, Neb. Buffett's company nearly quadrupled its investment in Apple to over ... 57 million shares during the last three months of last year. (AP Photo/Andrew Harnik, File) (Copyright 2017 The Associated Press. All rights reserved.)

Warren Buffett's Berkshire Hathaway Inc. said fourth-quarter net earnings rose nearly 15%, boosted in part by the stock market's end-of-year gains. 

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Berkshire's year-end results were released Saturday alongside Mr. Buffett's closely read annual letter to shareholders. 

Berkshire Hathaway reported fourth-quarter net earnings of $6.29 billion, or $3,823 per Class A share equivalent, up from $5.48 billion, or $3,333 a share, in the year-earlier period. Operating earnings, which exclude some investment results, fell to $4.38 billion, or $2,665 a Class A share, from $4.67 billion, or $2,843 a Class A share, in the year prior. 

The Omaha, Neb., conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers, retailers and even auto dealerships. It also holds large investments, especially in the stock market. 

Berkshire added two companies in 2016 -- metal components maker Precision Castparts Corp., its biggest acquisition ever, and battery maker Duracell -- which helped boost results. Berkshire subsidiaries also made a number of "bolt-on acquisitions." 

Book value, a measure of assets minus liabilities that is Mr. Buffett's preferred yardstick for measuring net worth, rose 10.7% to $172,108 a Class A share in 2016, compared with a 12% total return in the S&P 500, including dividends. 

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Mr. Buffett, in his letter, said that over the past 52 years -- "since present management took over" -- Berkshire's per-share book value has grown from $19 to $172,108, a rate of 19% compounded annually. 

For the full year, Berkshire's net earnings dipped to $24.07 billion from $24.08 billion. 

In addition, the 86-year-old Mr. Buffett, whose shrewd investments have earned him the nickname "the Oracle of Omaha," still has plenty of cash on hand for future acquisitions as a way to drive profit. In his annual letter, Mr. Buffett said Berkshire has $86 billion in "cash and equivalents," which includes U.S. Treasury Bills. 

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