Warren Buffett’s Berkshire Hathaway (BRK.A) - Get Report (BRK.B) - Get Report on Saturday swung to a profit in the fourth quarter vs. a year-earlier Kraft Heinz (KHC) - Get Report-induced loss as well as cash on hand that remains at near-record levels as the conglomerate’s collective investments continued to churn out positive returns.
The Omaha, Nebraska-based company on Saturday said it earned net income in the quarter of $29.2 billion, or $17,909 per Class A share equivalent, up from a loss of $25.4 billion, or $15,467 a share, the year before. The year-ago results were dragged down largely by an unexpected write-down at Kraft Heinz, of which Berkshire is a significant shareholder.
Cash on hand, meantime, totaled $128 billion as of Dec. 31, the company said, slightly down from $128.2 billion at the end of the third quarter but still near a record high.
“The opportunities to make major acquisitions possessing our required attributes are rare,” Buffett said in his widely anticipated letter to shareholders, also released Saturday.
Berkshire posted operating earnings of $4.4 billion, down from $5.7 billion a year earlier, due to weaker results in insurance underwriting and some of the company’s smaller operating businesses. Berkshire’s portfolio consists of multitudes of "value" companies that Buffett, his 96-year-old business partner Charlie Munger and their team have amassed over the years.
They are known for their buy-and-hold approach to investing, either hanging on to stocks for long periods of time or waiting for merger and acquisition activity to boost value.
The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include household names like Dairy Queen, Duracell, and Geico insurance, as well as Apple (AAPL) - Get Report, Kroger (KR) - Get Report and Wells Fargo (WFC) - Get Report, among others.
Shares of Berkshire Hathaway Class A shares ended the trading day Friday at $343,499, up 1.1% year to date. By contrast, the S&P 500 is up 3.3% so far this year.