Warren Buffet’s Berkshire reports record $30 billion profit

OMAHA, Nebraska: Despite foreign currency losses and rising interest rates contributing to lower earnings in the fourth quarter, Warren Buffett’s Berkshire Hathaway has announced its highest-ever annual operating profit.

In his annual shareholder letter, Buffet said that 2022 was a "good year" for Omaha-based Berkshire, after its businesses generated $30.8 billion in profits, despite rising inflation and supply chain disruptions, including those caused by Russia’s invasion of Ukraine.

After selling stocks worth some $16.3 billion in the fourth quarter, the company also increased its level of cash, ending the year with $128.6 billion.

It also bought back its own shares, repurchasing $2.6 billion and some $700 million more in the first six weeks of 2023.

In 2023, its stock price fell 1.5 percent, pulling down the 3.4 percent gain in the Standard & Poor’s 500, though its shares outpaced the index by 22 percentage points in 2022, reflecting their status as a defensive investment during difficult market conditions.

In a letter, Buffet said, "Berkshire shareholders trust us to treat their money as we do our own. And that is a promise we can make."

Officials noted that quarterly operating profits fell 8 percent to $6.71 billion, or $4,596 per Class A share, from $7.29 billion.

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

However, net results were misleading because they included gains and losses on investments that Berkshire has not sold, Buffett said.

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

Berkshire posted a net loss of $22.82 billion in 2022, highlighting declines in its $308.8 billion portfolio of common stocks, led by Apple.