Berkshire Hathaways operating income falls 8 in fourth quarter cash

Berkshire Hathaway’s operating income falls 8% in fourth quarter, cash balance rises to nearly $130 billion

Warren Buffett.

Gerhard Mueller | CNBC

Berkshire Hathaway’s operating profits fell in the fourth quarter as inflationary pressures weighed on the conglomerate’s operations.

Berkshire Hathaway’s operating profit totaled $6.7 billion for the fourth quarter of 2022, according to a press release on Saturday. That’s down 7.9% from last year, when earnings were $7.285 billion. Operating profit refers to the total profits of the conglomerate companies.

For the year, the conglomerate’s operating profits totaled $30.793 billion. That’s a 12.2% increase from $27.455 billion in 2021.

Meanwhile, Berkshire used $2.855 billion to buy back shares in the fourth quarter. That’s down from the year-ago period, when share buybacks totaled about $6.9 billion.

Against this backdrop, Berkshire’s cash position grew to $128.651 billion in the fourth quarter of 2022. That’s up from nearly $109 billion in the third quarter.

Buffett said in his annual letter to shareholders that Berkshire will continue to hold a “boatload” of cash and U.S. Treasury bills alongside its myriad businesses. He specified that future CEOs of the company will hold a “significant portion” of their net worth in Berkshire stock.

“We will also avoid behaviors that could lead to inconvenient cash needs at inopportune times, including financial panics and unprecedented insurance losses,” Buffett wrote.

“And yes, our shareholders will continue to save and thrive by retaining profits. There will be no finish line at Berkshire.”