berkshire hathaway’s operating earnings declined 8 in the fourth quarter to 67 billion after taxes hurt by a drop in profits at the company’s railroad business and a decline in the us dollar excluding the dollar’s fall which increased the value of the company’s brka brkb foreigncurrency debt berkshire’s operating earnings for the period would have risen about 13 from the fourth quarter of 2021 to 79 billion this is more indicative of the company’s earnings power given that quarterly currency volatility has little impact on berkshire’s underlying earnings power stock repurchases totaled 26 billion up from 1 billion in the third quarter bringing the total for 2022 to 79 billion that’s down sharply from 27 billion in 2021 and 247 billion in 2020 berkshire’s operating earnings per share for the fourth quarter which exclude changes in the value of the company’s investment portfolio fell 7 to about 4585 per class a share barron’s estimates that fell short of the factset consensus estimate of 5305 a share berkshire’s total earnings in the quarter were down 53 to 181 billion reflecting lower investment gains in the period most of the investment gains are unrealized gains in berkshire’s big equity portfolio ceo warren buffett tells investors to focus on the operating earnings because the overall result can be swamped by quarterly changes in the value of the equity portfolio for the year berkshire’s operating earnings rose 12 to a record 308 billion after taxes berkshire’s book value per share stood at about 323600 per class a share at the end of 2022 barron’s estimates down from 342600 at yearend 2021 reflecting a drop in the value of berkshire’s equity portfolio during the year berkshire had 536 billion of investment losses during 2022 including 586 billion of unrealized losses on the equity portfolio which stood 309 billion at yearend this marked only the fourth annual decline in book value during buffett’s 58 years at the helm book value however rose in the fourth quarter from roughly 310000 on september 30 berkshire’s class a shares which finished friday at 461705 now trade for 14 times the yearend book value the current pricetobook ratio is somewhat lower due to the increase in the value of berkshire’s equity portfolio since the start of 2023 paced by apple aapl  the company’s largest equity holding berkshire continues to sit on a large amount of cash even after paying nearly 12 billion for insurer alleghany in october berkshire’s total cash and equivalents mostly treasury bills stood at 128 billion on dec 31 compared with 109 billion on sept 30 it appears that berkshire sold a chunk of alleghany’s bond portfolio which totaled about 15 billion at midyear 2022 and the bulk of alleghany’s equity portfolio of around 3 billion berkshire continued to buy back stock after the start of 2023 repurchasing an estimated 700 million through feb 13 the date of the company’s 10k report berkshire disclosed in the 10k that it paid 82 billion for a 414 stake in pilot co in late january under an agreement reached with the haslam family in 2017 when berkshire bought an interest of 386 in the truckstop operator earlier this month barron’s suggested berkshire might pay 7 billion for the new stake the price for the 414 interest is more than double the nearly 3 billion that berkshire paid for the initial stake and brings its total interest in the parent of pilot flying j truck stops to 80 the purchase price for the 414 implies a total equity value on pilot of 20 billion and highlights one of buffett’s better investments during the past decade berkshire said in the annual 10k report that due to rate increases its geico autoinsurance unit is expected to generate an underwriting profit in 2023 after an underwriting loss of 19 billion in 2022 geico one of the top three auto insurers in the country has been moving to raise rates on policyholders to offset higher costs for claims including labor and parts the swing in geico’s profits anticipated for 2023 should bolster berkshire’s earnings this year geico’s voluntary policies in force fell by 17 million in 2022 and it may have lost its position as the no 2 auto insurer in the country to arch rival progressive which has bested geico with much stronger technology for pricing policies including the use of realtime driving information or telematics the forecast of 2023 underwriting profits for geico indicate that changes implemented by ceo todd combs are having a beneficial impact combs who also runs part of the berkshire equity portfolio was installed as geico ceo three years ago berkshire continues to benefit from higher interest rates on its cash–mostly held in treasury bills–and increased dividend income on its equity portfolio insurance investment income was up 66 in the fourth quarter to 2 billion after taxes and rose 35 for all of 2022 to 65 billion this is another factor that should bolster 2023 profits at the company profits at the burlington northern railroad were down 13 in the fourth quarter to 15 billion and were flat for all of 2022 relative to 2021 at 59 billion burlington northern’s results were negatively impacted by lower volumes in 2022 and higher fuel and other operating costs revenues rose nearly 12 for the year helped by higher sales per car load and fuel surcharges volumes were down 58 for the year berkshire’s powerhouse utility business saw an increase of 24 in fourthquarter profits to 739 million and a gain of 8 for the year to 39 billion the unit berkshire hathaway energy is one of berkshire’s most valuable businesses it has an implied value of about 90 billion based on the price that the unit paid to greg abel the head of berkshire’s noninsurance operations last year for a 1 stake in the business abel 60 is buffett’s likely successor as ceo buffett is 92 here is the succession language from the 10k “if for any reason the services of our key personnel particularly mr buffett were to become unavailable there could be a material adverse effect on our operations should a replacement for mr buffett be needed currently berkshire’s board of directors has agreed that mr abel should replace mr buffett the board continually monitors this risk and could alter its current view regarding a replacement for mr buffett in the future” berkshire hathaway energy formerly headed by abel is one of the largest producers of renewable power in the country and is investing heavily in electricity transmission networks it also owns several naturalgas ng00 pipelines