London Daily

Focus on the big picture.
Tuesday, Sep 15, 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
UK Doctors Warn Expanded Pharmacy First Scheme Could Put Patients at Risk
British Airlines Cut Short-Haul Capacity as Jet Fuel Costs Rise
UK News Publishers Forecast 40% Search Traffic Drop as AI Overviews Expand
Axel Springer Wins Approval for £575 Million Daily Telegraph Acquisition
London Mayor Sadiq Khan Opposes Heathrow Third Runway Over Climate Targets
Scotland, Wales and Northern Ireland Leaders Hold Summit Seeking Greater Autonomy
UK Energy Price Cap Set to Rise to £1,723 in October
UK Treasury Warns Middle East Conflict Is Threatening Economic Growth
Labour Moves to Retrospectively Cap Overseas Political Donations After Reform UK Funding Surge
HMRC Warns Nearly Seven Million Adults Are Unclear About State Pension Entitlements
UK Parliament Passes Sovereign Grant Reform Before Conference Recess
British Rail Passengers Gain Automatic Right to Switch Operators During Disruptions
Burnham Hosts Downing Street Business Summit as UK Fiscal Pressure Builds
Labour Government Moves to Challenge £72 Million in Reform UK Crypto Donations
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
NHS Records Busiest Summer on Record Amid Severe Heatwaves
Harrods Faces Potential £150 Million Compensation Bill Over Al Fayed Abuse Claims
UK Parliament Opens Debate on Landmark Assisted Dying Legislation
Metropolitan Police Investigate Reform UK Over Alleged Foreign Electoral Donations
UK Economy Expands 0.4% in July as AI Investment Boosts Activity
Bank of England Signals Caution on Rates as Inflation Pressures Persist
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
Bayeux Tapestry Draws Large Crowds at British Museum
Cuts to International Aid Raise Concerns Over Fragile Overseas Health Systems
UK Airlines and Logistics Operators Adjust Capacity as Fuel Costs Rise
UK Mortgage Arrears Edge Lower in Second Quarter
UK Government Advances New Devolution Offers for English Councils
UK Parliament Begins Debate on NHS Governance and Single Patient Record Reforms
Andy Burnham Launches Number 10 North Devolution Initiative
UK Parliament Rejects Assisted Dying Bill for Terminally Ill Adults
UK Bans Goods From Israeli Settlements in the Occupied West Bank
×