Shares of Berkshire Hathaway (NYSE: BRK.A) are likely to open higher on Monday after Warren Buffett’s company reported strong earnings for the past quarter.
Fundamental analysis: Net earnings soar, record buybacks
Berkshire reported operating income of $5.02 billion for the fourth quarter, up from $4.42 billion from a year ago. Operating earnings fell 9% to $21.92 billion, while net earnings soared 23% to $35.83 billion.
Berkshire Hathaway continued to buy back its stock in 2021, after purchasing a record amount of shares last year, according to the company’s annual letter published on Saturday.
Warren Buffet’s conglomerate purchased about $9 billion of its own stock in the fourth quarter, amounting to a total of $24.7 billion the company bought in 2020.
“Berkshire has repurchased more shares since year-end and is likely to further reduce its share count in the future,” the company said in the annual letter.
Berkshire bought back roughly $9 billion in the third quarter, up from $5.1 billion it purchased in Q2. The conglomerate bought back a total of $5 billion of its stock in 2019.
Warren Buffet pointed out that Berkshire initiates repurchase programs only when it believes the stock is below its intrinsic value.
“In no way do we think that Berkshire shares should be repurchased at simply any price,” the company said in the annual letter.
“I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse.”
Technical analysis: Buyers take a step back
Shares A of Berkshire Hathaway touched a new all-time high on Thursday. The conglomerate’s
