Warren Buffett’s Berkshire Hathaway Inc. said fourth-quarter profit rose 9.6 percent, hitting $19.5 billion for the full year, eclipsing the 2012 record annual profit of $14.8 billion.
Berkshire Hathaway 3G Capital acquired H.J. Heinz Co. for more than $28 billion last year. At Berkshire, net income climbed to $4.99 billion, or $3,035 a share, from $4.55 billion, or $2,757, a year earlier, Omaha, Nebraska- based Berkshire said this morning in a statement on its website.
Operating earnings were $2,297 per share, beating the $2,204 estimate of three analysts surveyed by Bloomberg.
For decades, Mr. Buffett has used premiums from insurance subsidiaries like Geico to fuel Berkshire’s growth. The funds have allowed the billionaire chairman and chief executive officer to amass the largest equity stakes in companies such as Coca-Cola Co., while also taking over whole businesses. Berkshire now has dozens of operating units spanning the energy, transportation, manufacturing and retail industries.
“All the businesses are doing pretty well,” Cliff Gallant, an analyst at Nomura Holdings Inc., said in a phone interview before today’s announcement. “They’re all leveraged to a good U.S. economy.”
The insurance segment posted a quarterly underwriting profit of $394 million, compared with a loss of $19 million a year earlier. The premiums held by those businesses before paying claims, known as float, was little changed from the end of September at about $77 billion. The fourth quarter of 2012 included claims from superstorm Sandy, which struck the U.S. East Coast.
“On the operating front, just about everything turned out well for us last year,” Mr. Buffett wrote in today’s letter to shareholders.
Mr. Buffett’s cash hoard stood at $48.2 billion on Dec. 31, compared with $42.1 billion at the end of September.
Consumer and business spending has helped boost the U.S. economy and is laying the groundwork for further gains this year. Gross domestic product expanded at a 2.4 percent pace in the fourth quarter, Commerce Department figures showed yesterday. It was the third straight quarter that growth exceeded 2 percent, the first time that happened since 2010.
Mr. Buffett’s company stands to benefit from that trend because many of its subsidiaries count the U.S. as their largest market. Among the more than 80 operating businesses are furniture retailers, a trucking operation and a home builder. Berkshire expanded last year by buying Nevada’s largest energy utility and half of ketchup maker HJ Heinz Co.