Berkshire Hathaway Q4 results – Crestwood Advisors

On 2/25, Berkshire Hathaway released their 2021 Q4 results and Warren Buffett’s letter to shareholders. Annual letter from Buffett is attached.

Key takeaways from the quarter are as follows:

Berkshire reported $7.28b operating earnings versus $5.02b from prior year, up 20.4%
Buffett repurchased $6.8b of shares in Q4 and $27.1b for 2021 representing 3.7% of shares
Cash and shares of Apple represent 40% of value of firm.

Current Price: $330 Price Target: $370 (raised from $330)

Position Size: 3.6% TTM Performance: 26.9%

Highlights from quarter – solid cyclical rebound

Railroads – YoY revenue rose 11.6% and earnings rose 13.3%
Berkshire energy – YoY revenue up 9.6% and earnings up 15.7%
Manufacturing, service and retail – Profits rose 22.9% YoY
Insurance revenues rose 4.29% and profits fell -2.3% YoY though BRK’s insurance profits are very lumpy.

Greg Abel, Buffett’s appointed successor, published a note on Berkshire’s ESG endeavors in the appendices of the annual report.

They target cutting BHE’s greenhouse emissions from a baseline of 80 metric tons to 40 in 2030.

Berkshire Hathaway Energy will retire 16 coal units between 2022-2030 and all coal units by 2049 achieving net zero emissions by 2050!
For Burlington Northern Santa Fe, they target a 30% reduction in greenhouse gases by 2030.

Valuation: Berkshire is selling at a 15% discount to intrinsic value using sum of the parts. Their cash of $145b and Apple representing $150b comprises 40% of the company’s valuation.