The conglomerate saw operating earnings fall 14 per cent to US$6.7 billion in the fourth quarter, as higher prices for materials and labor hit the firm’s railroad and insurance operations. Still, Buffett reminded investors to keep the faith in America’s economy, just as he touted Berkshire’s record operating earnings of $30.8 billion for the year.
“While customer demand for products and services was relatively good in 2022, demand began to weaken in the second half of the year at certain of our businesses,” Berkshire said in its results. “We experienced the negative effects of higher materials, freight, labor and other input costs through much of 2022.”
The comment comes after U.S. President Joe Biden called for lawmakers to quadruple the levy on corporate stock repurchases alongside a greater tax on billionaires. Democrats have favored such increases in the hopes that they would motivate companies to invest more in the economy and increase wages, but those aspects of the president’s economic agenda are unlikely to pass in a divided Congress.
“There wasn’t a lot of meat in here,” Shanahan said. “The letter itself is a little lacking in terms of the wit and wisdom that we’ve become accustomed to seeing.”Buffett also made space to discuss the future of the company, including a likely reference to how much stock his successor Greg Abel holds in it.