Warren Buffett’s Berkshire posts 8% drop in operating earnings as railroad business sags

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Berkshire Hathaway’s operating earnings declined 8% in the fourth quarter to $6.7 billion after taxes, hurt by railroads and a decline in the U.S. dollar.

Berkshire Hathaway’s operating earnings declined 8% in the fourth quarter to $6.7 billion after taxes, hurt by a drop in profits at the company’s railroad business and a decline in the U.S. dollar.

This is more indicative of the company’s earnings power, given that quarterly currency volatility has little impact on Berkshire’s underlying earnings power. Berkshire had $53.6 billion of investment losses during 2022, including $58.6 billion of unrealized losses on the equity portfolio, which stood $309 billion at year-end.Book value, however, rose in the fourth quarter from roughly $310,000 on September 30.

Berkshire continued to buy back stock after the start of 2023, repurchasing an estimated $700 million through Feb. 13, the date of the company’s 10-K report. Berkshire said in the annual 10-K report that due to rate increases, its Geico auto-insurance unit is expected to generate an underwriting profit in 2023, after an underwriting loss of $1.9 billion in 2022. Geico, one of the top three auto insurers in the country, has been moving to raise rates on policyholders to offset higher costs for claims, including labor and parts.

 

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