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Financials

Berkshire Hathaway Share Repurchases Doubled in Q4

(BRK.A), (BRK.B)

Berkshire Hathaway accelerated its stock buybacks in the fourth quarter of 2023. The repurchases doubled the $1.1 billion in the third quarter. The company reported that “approximately $2.2 billion was used to repurchase Berkshire shares during the fourth quarter of 2023 bringing the total for the year to approximately $9.2 billion. On December 31, 2023 there were 1,441,483 Class A equivalent shares outstanding.”

Berkshire’s stock buyback initiative allows the company to purchase its Class A and Class B shares whenever Warren Buffett, Berkshire’s Chairman and CEO, deems the repurchase price to be below the company’s conservatively estimated intrinsic value. These repurchases can occur through open market transactions or privately negotiated deals.

The conglomerate reported strong operating earnings in Q4 of $8.481 billion as compared to $6.625 billion in Q4 2022. Operating earnings for the full year were a robust $37.350 billion as compared to $30.853 in the full year of 2022.

Berkshire’s cash reserves has continued to grow, reaching $167.6 billion.

© 2024 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Hathaway Continued Stock Buybacks & Posts Robust Earnings in Q3 2023

(BRK.A), (BRK.B)

Berkshire Hathaway has continued its stock buybacks in the third quarter of 2023, reporting that “approximately $1.1 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $7.0 billion. On September 30, 2023 there were 1,445,546 Class A equivalent shares outstanding.”

The conglomerate reported strong operating earnings in Q3 of $10.761 Billion as compared to $7.651 billion in Q3 2022. Operating earnings for the first nine months were a robust $28.869 billion as compared to $24.228 in the first nine months of 2022.

Despite recent acquisitions of Allegany Corp., the controlling interest in Pilot Corp., and buying Dominion Energy’s 50% limited partnership stake in the Cove Point LNG facility, Berkshire’s cash reserves has continued to grow, reaching $157 billion.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Earnings Strong, as Buybacks Continue

(BRK.A), (BRK.B)

Berkshire Hathaway’s overall operating earnings for Q2 2023 were a strong $10.043 billion, representing a solid increase from the second quarter of 2022, which recorded operating earnings of $9.417 billion. The 6.6 percent rise in earnings came as the conglomerate’s cash position grew to just over $147 billion, which is up from 130.6 billion in Q1 2023.

Insurance-underwriting was particularly strong with earnings 1,247 billion in Q2 2023, as compared to $715 million in Q2 2022.
At June 30, 2023, insurance float was approximately $166 billion, an increase of approximately $2 billion from yearend 2022.

Berkshire Hathaway continued its stock buybacks with approximately $1.4 billion used to repurchase Berkshire shares during the second quarter of 2023. This brings the six-month total share repurchases to $5.8 billion.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Hathaway Ups Stock Buybacks in First Quarter

(BRK.A), (BRK.B)

Berkshire Hathaway, the multinational conglomerate headed by the legendary investor Warren Buffett, has continued its trend of buying back its own stock in the first quarter of 2023. The company committed $4.4 billion to the repurchase of shares of both Class A and Class B common stock. This represents an increase from the $2.6 billion that was spent on stock buybacks in the fourth quarter of 2022.

This move by Berkshire is a continuation of the company’s buyback program that started in 2011. In 2022, Berkshire Hathaway bought back a total of $7.9 billion of its stock. The recent purchase of $4.4 billion shows the company’s continued confidence in its own business prospects.

Warren Buffett has long been a proponent of share buybacks, and he defended Berkshire’s buybacks in his recent Chairman’s Letter. He wrote, “The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices.”

Buffett has also been critical of those who oppose share buybacks. He has referred to them as “economic illiterates” or “silver-tongued demagogues” who do not understand the benefits of the practice. He believes that buybacks can be a useful tool in returning value to shareholders and that they should be conducted when the company’s shares are undervalued.

Berkshire Hathaway’s commitment to share buybacks reflects its confidence in its own business prospects and its belief that the company’s shares are undervalued. For investors, this move may signal a positive outlook for Berkshire Hathaway’s future performance.

© 2023 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Buys Back $1.05 Billion in Stock in 3rd Quarter

(BRK.A), (BRK.B)

Warren Buffett continues to see Berkshire Hathaway stock as a good value and use of Berkshire’s profits. Approximately $1.05 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $5.25 billion.

The buybacks come as Berkshire posted $7,761 billion in operating earnings for the third quarter, up from $6,466 billion for the same quarter in 2021.

At September 30, 2022, insurance float (the net liabilities we assume under insurance contracts) was approximately $150 billion, an increase of $3 billion since yearend 2021.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).

Third Quarter

First Nine Months

2022

2021

2022

2021

Insurance-underwriting

$

(962

)

$

(784

)

$

(334

)

$

356

Insurance-investment income

1,408

1,161

4,484

3,588

Railroad

1,442

1,538

4,477

4,305

Utilities and energy

1,585

1,496

3,101

2,939

Other controlled businesses

3,247

2,706

9,521

8,329

Non controlled businesses*

362

310

874

665

Other**

679

39

1,961

(12

)

Operating earnings

$

7,761

$

6,466

$

24,084

$

20,170

* Includes certain businesses in which Berkshire has between a 20% and 50% ownership interest.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Hathaway’s Insurance Float Up $1 Billion

(BRK.A), (BRK.B)

Berkshire Hathaway’s Insurance float has continued its growth with an increase of $1 billion at the end of the first quarter of 2022, as compared to the end of the fourth quarter of 2021.

At March 31, 2022, insurance float (the net liabilities we assume under insurance contracts) was approximately $148 billion, an increase of approximately $1 billion since yearend 2021.

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Hathaway Continued Stock Buybacks in Q1 2022

(BRK.A), (BRK.B)

Berkshire Hathaway has continued its stock buybacks in the first quarter of 2022, reporting that “Approximately $3.2 billion was used to purchase shares of Class A and Class B common stock during the first quarter of 2022. On March 31, 2022, there were 1,470,875 Class A equivalent shares outstanding.”

The buybacks have slowed considerably from 2021’s pace, reflecting Berkshire’s rising share price. In the fourth quarter of 2021, Berkshire repurchased $6.9 billion in combined Class A and Class B common stock.

Berkshire’s $27 billion in buybacks for 2021 was a record for the company.

At the Berkshire Hathaway annual meeting, Buffett revealed that he didn’t repurchase any shares in April 2022.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Financials

Berkshire Operating Earnings Top $7B in 4th Quarter, $27.4B for 2021

Categories
Financials

Berkshire Hathaway Q2 Results

OMAHA, Neb.–(BUSINESS WIRE)– Berkshire Hathaway Inc.: (BRK.A; BRK.B)

Berkshire’s operating results for the second quarter and first six months of 2021 and 2020 are summarized in the following paragraphs. However, we urge investors and reporters to read our 10-Q, which has been posted at www.berkshirehathaway.comThe limited information that follows in this press release is not adequate for making an informed investment judgment.

Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the second quarter and first six months of 2021 and 2020 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).

Second Quarter

First Six Months

2021

2020

2021

2020

Net earnings (loss) attributable to Berkshire shareholders

$ 28,094

$ 26,295

$ 39,805

$ (23,451)

Net earnings (loss) includes:

Investment and derivative gains/losses –

Investments(1)

21,233

31,017

25,540

(23,500)

Derivatives

175

628

561

(472)

21,408

31,645

26,101

(23,972)

Impairments of intangible assets(2)

(10,863)

(10,902)

Operating earnings

6,686

5,513

13,704

11,423

Net earnings (loss) attributable to Berkshire shareholders

$ 28,094

$ 26,295

$ 39,805

$ (23,451)

Net earnings (loss) per average equivalent Class A Share

$ 18,488

$ 16,314

$ 26,078

$ (14,500)

Net earnings (loss) per average equivalent Class B Share

$ 12.33

$ 10.88

$ 17.39

$ (9.67)

Average equivalent Class A shares outstanding

1,519,576

1,611,760

1,526,392

1,617,325

Average equivalent Class B shares outstanding

2,279,363,382

2,417,640,311

2,289,587,640

2,425,986,839

Note: Per share amounts for the Class B shares are 1/1,500th of those shown for the Class A

(1) 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 2021 include gains of $21.0 billion in the second quarter and $23.8 billion in the first six months of 2021 and in 2020 include a gain of $34.5 billion in the second quarter and a loss of $19.7 billion in the first six months due to changes during the second quarter and the first six months in the unrealized gains that existed in our equity security investment holdings. Investment gains/losses in 2021 also include after-tax realized gains on sales of investments of $183 million in the second quarter and $1.6 billion in the first six months and in 2020 include after-tax realized losses on sales of investments of $3.5 billion during the second quarter and $2.6 billion during the first six months.

The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.

(2) Includes $9.8 billion attributable to impairments of goodwill and certain identifiable intangible assets recorded in connection with Berkshire’s acquisition of Precision Castparts Corp. in 2016.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).

Second Quarter

First Six Months

2021

2020

2021

2020

Insurance-underwriting

$ 376

$ 806

$ 1,140

$ 1,169

Insurance-investment income

1,219

1,368

2,427

2,754

Railroad, utilities and energy

2,256

1,764

4,210

3,515

Other businesses

3,004

1,449

5,623

3,487

Other

(169)

126

304

498

Operating earnings

$ 6,686

$ 5,513

$13,704

$11,423

Approximately $6.0 billion was used to repurchase Berkshire shares during the second quarter of 2021 bringing the six month total to $12.6 billion. At June 30, 2021 insurance float (the net liabilities we assume under insurance contracts) was approximately $142 billion, an increase of $4 billion since yearend 2020.

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.

Categories
Financials

Berkshire Hathaway Accelerates Share Buybacks

(BRK.A), (BRK.B)

Investors wondering whether Warren Buffett thinks that Berkshire Hathaway stock has been undervalued, now have their answer. He does.

Berkshire Hathaway dramatically increased its share buybacks in the third quarter.

Approximately $9 billion was used to repurchase Berkshire shares during the third quarter, as compared to $5.1 billion in buybacks in the second quarter. This brings the nine month total share repurchases to approximately $16 billion.

The average share price Berkshire paid was: $188 for $2.5 billion in July, $210 for $3.1 billion in August, and $215.8 for $3.6 billion in September.

Warren Buffett’s annual letter to shareholders for 2019 detailed his thinking on share buybacks:

In past reports, we’ve discussed both the sense and nonsense of stock repurchases. Our thinking, boiled down: Berkshire will buy back its stock only if a) Charlie and I believe that it is selling for less than it is worth and b) the company, upon completing the repurchase, is left with ample cash.

Calculations of intrinsic value are far from precise. Consequently, neither of us feels any urgency to buy an estimated $1 of value for a very real 95 cents. In 2019, the Berkshire price/value equation was modestly favorable at times, and we spent $5 billion in repurchasing about 1% of the company.

Over time, we want Berkshire’s share count to go down. If the price-to-value discount (as we estimate it) widens, we will likely become more aggressive in purchasing shares. We will not, however, prop the stock at any level.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.