In the fourth quarter, operating profits for the conglomerate surged as businesses continued to roar back to life from the economic downturn. Warren Buffet increased his bet on the comeback by buying a record amount of shares.
The company's operating earnings, which include profits from the various businesses of the conglomerate, totaled $7.285 billion in the fourth quarter of 2021, according to a company release posted Saturday. The profit was up 45% from a year earlier.
The operating earnings for the year were $27.455 billion. That is up 25.2% from 2020.
In the fourth quarter, the company bought back $ 6.9 billion of its shares, bringing the total for the year to approximately $27 billion. The amount is up from the $24.7 billion that was bought back in 2020. The fourth-quarter pace was a bit slower than the third quarter.
At the end of the year, the cash horde of the company stood at over $150 billion. At the end of the third quarter, it was a record $150.2 billion.
In his annual shareholder letter, Buffett explained that he and Vice Chairman Charlie Munger did not find much in the way of big acquisitions that were once their hallmark. The pair finds share repurchases to be the best way to deploy cash at the moment.
The easiest path to increase your share of the businesses is through that simple act.
Overall earnings, which reflect the equity investments of the company, came in at $39.646 billion for the quarter. The year-ago period had a 10% increase in that amount.
Quarterly changes in the company's investment gains or losses are downplayed by the company.
The amount of investment gains/losses in any given quarter is meaningless and can be misleading to investors who have little or no knowledge of accounting rules.
The railroad, utilities and energy business of Warren Buffet's company had earnings of $2.241 billion, up 12.3% from a year earlier. The insurance-underwriting business earned $372 million after losing $299 million in the fourth quarter.
The earnings report came as the B shares of the company broke out to a record high.
Overall earnings for the year came in at $89.795 billion, more than double 2020's total of $42.51 billion.
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