Warren Buffett's Berkshire Hathaway sees profit rise 23%

Net earnings up to $35.8 billion

Berkshire Hathaway Inc.'s fourth-quarter profits rose on the back of a soaring stock market.

Berkshire's net earnings rose to $35.8 billion, or $23,015 a Class A share equivalent, up almost 23% from the year before's profit of $29.2 billion, or $17,909 a share.

Operating earnings, which exclude some investment results, rose to $5 billion from $4.4 billion the year prior. Billionaire investor Warren Buffett has said operating earnings better reflect Berkshire's performance than net earnings that incorporate unrealized investment gains or losses.

Ticker Security Last Change Change %
BRK.A BERKSHIRE HATHAWAY, INC. 400,000.00 +3,999.00 +1.01%
BRK.B BERKSHIRE HATHAWAY, INC. 266.15 +2.67 +1.01%

READ: WARREN BUFFETT’S ANNUAL LETTER TO BERKSHIRE HATHAWAY SHAREHOLDERS

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

An accounting-rule change in recent years has meant that Berkshire's earnings often reflect the larger performance of the stock market.

Ninety-year-old Mr. Buffett has built his sprawling Omaha, Neb., conglomerate as a vehicle for investors interested in long-term gains. As such, Berkshire operates a variety of different businesses that Mr. Buffett thinks will stand the test of time. The company also invests the "float" from the premiums its insurance customers pay.

Berkshire Hathaway Inc.'s fourth-quarter profits rose on the back of a soaring stock market. (AP Photo/Nati Harnik)

HOW TO INVEST LIKE WARREN BUFFETT IN 2021

Berkshire's available cash and short-term Treasury bonds were $138.3 billion in the fourth quarter. Investors have been watching to see if Mr. Buffett would buy a significant stake in a large company as he has in other turbulent times in the U.S. economy.

Despite the rising profit, Berkshire's stock performance fell short of the broader market for a second year running. The S&P 500 index increased by 16.3% for the year ended Dec. 31 while Berkshire's stock increased 2.4%. Berkshire's stock also lagged behind the index in 2019.