London Daily

Focus on the big picture.
Tuesday, Jul 28, 2026

Buffett's Berkshire has record annual operating profit despite inflation, rate pressures

Buffett's Berkshire has record annual operating profit despite inflation, rate pressures

Warren Buffett's Berkshire Hathaway Inc (BRKa.N) on Saturday reported its highest-ever annual operating profit, even as foreign currency losses and rising interest rates contributed to lower earnings in the fourth quarter.

Buffett called 2022 a "good year" for Berkshire in his annual shareholder letter, after the conglomerate's dozens of businesses generated $30.8 billion of profit despite rising inflation and supply chain disruptions, including from the war in Ukraine.

Berkshire also bulked up its cash hoard, ending the year with $128.6 billion after selling about $16.3 billion of stocks in the fourth quarter.

The Omaha, Nebraska-based company found more value buying back its own shares, repurchasing $2.6 billion, and bought back about $700 million more in the first month-and-a-half of 2023.

Though its stock price is down 1.5% this year, lagging the 3.4% gain in the Standard & Poor's 500 (.SPX), Berkshire shares outpaced the index by 22 percentage points in 2022, reflecting their status as a defensive investment in rocky markets.
Berkshire shareholders "trust

us to treat their money as we do our own," Buffett said in his letter. "And that is a promise we can make."

Quarterly operating profit fell 8% to $6.71 billion, or $4,596 per Class A share, from $7.29 billion.

Net income for the quarter fell 54% to $18.16 billion, or $12,412 per Class A share, from $39.65 billion a year earlier.

Buffett considers net results misleading because they include gains and losses on investments that Berkshire hasn't sold.


GEICO STRUGGLES PERSIST


Operating results included about $1.2 billion of currency losses and a sixth straight underwriting loss at the car insurer Geico, which has boosted premiums after struggling with accident claims and properly pricing policies to reflect risk.

Berkshire projected that Geico, which shed 7% of its 41,000-person workforce last year, will generate an underwriting profit in 2023.

Results also reflected a 24% jump in profit from energy and utility operations, as well as Berkshire's share of Occidental Petroleum Corp's (OXY.N) earnings after it built a 21.4% stake in the oil company.

Berkshire also owns 20.4% of American Express Co (AXP.N), which its financial results do not incorporate.

Though rising rates helped Berkshire generate more income from insurance investments, they also hurt its Clayton Homes unit and namesake real estate brokerage by cutting into demand for housing construction, purchases and refinancings.

In addition, profit at the BNSF railroad fell 13% as the Federal Reserve's rate-hike campaign began slowing the nation's economy, and shipping volumes of consumer, industrial and agricultural products as well as coal all declined.

"Interest rates were the primary driver in somewhat soft fourth-quarter results" in an otherwise "pretty strong year" for Berkshire, Jim Shanahan, an Edward Jones & Co analyst with a "buy" rating on Berkshire.

For all of 2022, Berkshire posted a net loss of $22.82 billion, though that largely reflected declines in its $308.8 billion portfolio of common stocks, led by Apple Inc (AAPL.O).


MORE FLOAT


Berkshire did spend $11.5 billion in the fourth quarter to buy the insurance company Alleghany Corp.

That purchase helped boost insurance "float," which reflects premiums collected up front before claims are paid and help fund growth, 12% last year to $164.1 billion.

"Buffett takes those insurance premiums and buys good quality businesses," said Bill Smead, a longtime Berkshire investor at Smead Capital Management in Phoenix, which invests $5.5 billion.

Thomas Russo, whose Gardner Russo & Quinn in Lancaster, Pennsylvania invests $8 billion, about 17% of which is in Berkshire, added: "Buffett often describes float as more important than cash."

Berkshire also spent $8.2 billion on Jan. 31 to boost its stake in truck stop operator Pilot Travel Centers to 80% from 38.6%.

Cathy Seifert, a CFRA Research analyst who rates Berkshire "hold," said Geico remains a "big pain point" because of elevated accident losses, and called on it to disclose "more about what it's doing to rectify a chronic situation."

Newsletter

Related Articles

0:00
0:00
Close
Badenoch Offers Tory Votes to Keep Serious Offenders in Prison
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
Another AI Genius Left the United States — and Silicon Valley Is Starting to Worry
Shein Reports $99mn Loss as Trade Barriers Test Low-Cost Model
CXMT Gains 466% in China’s Biggest IPO Since 2010
Amazon Seeks Approval for 5,105-Satellite Mobile Network
Burnham Puts School-to-Work Reform at Centre of Welfare Strategy
Johnson & Johnson Agrees to $5.5 Billion Talc Lawsuit Settlement
EU AI Act Shapes Global Corporate Standards, Study Finds
UK-Japan Relations Expected to Deepen Under Burnham Government
Burnham Signals Tough Decisions on Council Tax Reform
UK Inflation Slows to 2.6% in June
Bank of England Holds Interest Rates at 3.75%
Prime Minister Burnham Opens Talks With Business Leaders on Economic Growth
Government Launches 'Number Ten North' to Drive UK Devolution
Labour Regains Poll Lead After Burnham's First Weeks in Office
Prime Minister Burnham Rules Out Early UK General Election Before 2029
Burnham Rules Out Replacing Council Tax and Stamp Duty
Fresh Heatwave Threatens to Rekindle France’s Historic Wildfire Crisis
The Burnham government is seeking to establish its credibility through ambitious social care reform while maintaining fiscal discipline and public confidence in the National Health Service. Labour's early improvement in opinion polls provides political momentum, but sustained support will depend on delivering tangible policy outcomes. Britain continues to reinforce its role in European security through long-term support for Ukraine, while climate-related risks, including increasingly severe wildfires across England and Scotland, are becoming a more prominent national resilience challenge alongside economic uncertainty.
United Kingdom Economy Remains Exposed to Global Energy Risks
Prime Minister Dismisses Calls for an Early General Election
Scottish Wildfires Continue to Stretch Emergency Services
United Kingdom Faces Rising Wildfire Risk as Heatwave Continues
Lower Oil Prices Ease Inflation Concerns and Support Financial Markets
Financial Conduct Authority Launches Consumer Campaign on Car Finance Compensation
Government Prioritises Employment Over Benefit Cuts in Welfare Reform Plans
Prime Minister Rules Out Sweeping Property Tax Changes Before Autumn Budget
AstraZeneca Beats Expectations as Cancer Medicines Drive Strong Profit Growth
Labour Regains Narrow Polling Lead After Burnham's First Week in Office
United Kingdom Reaffirms Long-Term Commitment to Ukraine Under Burnham Government
Prime Minister Andy Burnham Makes Social Care Reform the First Major Test of His Government
Following OpenAI's Cyberattack: 'Most Companies Still Do Not Understand What Is Coming'
Autopsy Finds No Violence in Death of Epstein-Linked Model Scout
Indian Education Minister Resigns After Cockroach Youth Protests
California Desert Data-Centre Plan Stalls as Water and Power Disputes Mount
Northern Ireland Border Security Tightened After Military-Grade Explosive Interception
British Hospitality Sector Targets Summer Visitors Through Regional Promotions
England River Access Debate Intensifies After New Data Shows Limited Public Access
Royal Navy Strengthens Maritime Vigilance Amid Rising Security Concerns
UK Education Department Expands Mental Health Support for Young People Entering Work
UK Tourism Industry Launches Summer Campaigns to Boost Domestic Travel
North England Transport Plans Advance to Support Industrial Growth
Financial Markets Watch New Government’s Economic Strategy as Investors Assess Fiscal Risks
Royal Navy Continues Monitoring Russian Naval Activity Near UK Waters
UK Care Workers May Receive Immigration Exemptions Under Proposed Visa Changes
Health Secretary Yvette Cooper Begins Emergency Talks to Address NHS Staffing Shortages
UK Banks Launch High-Interest Savings Offers to Attract Household Deposits
North Sea Oil Drilling Projects Face Delays After Offshore Equipment Accident
Cairngorms Wildfire Highlights Growing Pressure on UK Emergency Services
×