Stock gains power Warren Buffett#39;s Berkshire Hathaway to higher profit

Warren Buffett.

Warren Buffett.

Warren Buffett’s Berkshire Hathaway Inc on Saturday said quarterly operating income rose 14%, aided by improved results from its insurance businesses, while soaring prices of stock holdings such as Apple Inc led to a nearly $ 36 billion overall profit.

Fourth-quarter operating income rose to $ 5.02 billion, or approximately $ 3,252 per Class A share, from $ 4.42 billion, a year earlier.

Net income, reflecting the stock gains, rose 23% to $ 35.84 billion from $ 29.16 billion a year earlier.

Warren Buffett’s Berkshire bought billion-dollar stakes in Chevron and Verizon in December quarter, trimmed Apple holding

For all of 2020, operating income fell 9% to $ 21.92 billion, while net income fell 48% to $ 81.42 billion.

Berkshire, whose shares trailed the broader market over the last decade and significantly in 2019 and 2020, repurchased about $ 9 billion of stock in the quarter, a sign Buffett considers his Omaha, Nebraska-based conglomerate undervalued.

For all of 2020, Berkshire said it bought back $ 24.7 billion of its own stock, topping its old record $ 5 billion in 2019.

“At a discount of 40% to intrinsic value, the repurchases looked extraordinarily compelling,” said Tom Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, a longtime Berkshire shareholder. “Repurchases capture forever the benefits of Berkshire’s businesses for the remaining shareholders.”

Berkshire stock has risen 4.8% this year, beating the Standard & Poor’s 500’s 1.5% gain.