Berkshire Hathaway earnings beat by $804 a share and rise to a record

Warren Buffett’s 2015 annual letter to shareholders crossed Saturday morning.

The letter also included Berkshire Hathaway’s latest quarterly earnings, which showed that the company earned $3,333 in earnings per share (EPS) for Q4.

That beat Wall Street’s forecast for $2,529, according to Bloomberg.

In all, profits rose 32% to a record $5.48 billion.

Operating EPS came in at $2,843, versus $2,814 expected.

The results showed that Berkshire’s gain in net worth last year was $15.4 billion, and the company’s per-share book value has grown at a 19.2% compounded rate annually.

But it was a tough year for Berkshire’s stock, which declined 12%, more than the S&P 500’s 0.7% drop, and the weakest performance for the shares since 2009.

From December 1964 to December 2015, the stock rallied by an astronomical 1,000,000%.

Buffett noted in the letter that BNSF railroad, the massive transport company Berkshire owns, “dramatically improved” its service after a poor performance in 2014 he had apologised for. Berkshire spent about $5.8 billion in capital expenditure to improve service.

Together with BNSF, the so-called “Powerhouse Five”, which includes Berkshire’s five most profitable non-insurance businesses, earned $13.1 billion last year.

With the acquisition of Precision Castparts (a supplier to the aerospace industry) which was Berkshire’s largest ever, this group now becomes the “Powerhouse Six”.

“PCC fits perfectly into the Berkshire model and will substantially increase our normalized per-share earning power,” Buffett wrote.

Berkshire bought more shares in each of its “big four” investments last year: American Express, Wells Fargo, Coca-Cola, and IBM.

In 2015, Berkshire’s subsidiaries contracted for 29 so-called bolt-ons, which are other businesses that are seen as great fits for the existing subsidiaries. These came at a cost ranging from $300,000 to $143 million.

The letter contained a preview of the forthcoming annual meeting. As earlier reported, there will be a livestream of the Q&A portion of the meeting between Buffett, vice chairman Charlie Munger, journalists and investors for the first time, hosted by Yahoo Finance.

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