Berkshire Hathaway Inc. (NYSE:BRK.A) reported its Q4 earnings for 2014, which showed that the 17% yearly drop in its profits was because of a decline in an investment gain and a fall in investment income at 2.7% insurance units amounting to $880 million.
The net profits dropped thus bringing the amount down to $4.16 billion (while in other words, $2529/share) which was well below analyst estimates of $2,702.
There was a $192 million amount in the derivative and investment gain portion which also showed a strong decline from the last year’s same period, amounting to $1.21. A year ago, Berkshire Hathaway Inc. (NYSE:BRK.A) recorded its one-time gain amounting to $1.21 billion on investments by Warren Buffett in Goldman Sachs Group Inc. (NYSE:GS) as well as General Electric Company (NYSE:GE) that were carried out through the financial crisis.
Berkshire Hathaway Inc. (NYSE:BRK.A) witnessed an increase in its quarterly earnings by Railroad Burlington Santa Fe (BNSF) contribution amounting to $1.19 billion, while its last year’s amount stood at $1.12 billion. Warren Buffett wasn’t pleased with BNSF’s delays in service, given that it is the company’s largest business unit.
Geico and two reinsurance businesses at Berkshire Hathaway Inc. (NYSE:BRK.A) had low underwriting results in the quarter. However, even with the underwriting profit drop in its insurance units, the company offset its decline with the earnings from operating subsidiaries rising on a yearly basis by 10%, thus amounting to $3.03 billion. The company now mostly generates income from its operating subsidiaries.
Berkshire Hathaway Inc. (NYSE:BRK.A) units were beneficial given the recovery that took place in the American economy for its previous few quarters. The profits in its energy unit were $358 million with a $33 million increase from its previous year. Taking a holistic view, the earnings that were recorded by Berkshire Hathaway Inc. (NYSE:BRK.A) such as from its energy and railroad units caused itsmarket value to increase far more than $360 billion. Now, it ranks as the fourth largest public company worldwide.
On the other hand, segments such as service, manufacturing and retail made a benefit of nearly $1.05 billion for the company.
Berkshire Hathaway Inc. (NYSE:BRK.A) had to increase the headcount of its employees to 340,499 employees, which was a 2.9% increase as its operations expanded through acquisitions.
There was an increase in net income of $19.9 billion in the previous year compared to the $19.5 billion increase in 2013. Another plus point was the increase in operating profit of 9% year over year, thus amounting to $16.55 billion which was $10,071/share. On the other hand, the book value was 8.3% more than what it was in the last year, leading to a value of $146,186/share. Berkshire Hathaway Inc. (NYSE:BRK.A) owned $63.27 billion cash as the year came to a draw with the capacity to make at least one huge acquisition. There are $117.5 billion in equity investments that it has in various renowned companies.
