By Nicole Friedman
Berkshire Hathaway Inc.‘s earnings surged last year due to unrealized investment gains, but the conglomerate’s cash pile totaled $128 billion as of Dec. 31, the company said Saturday, slightly down from $128.2 billion at the end of the third quarter.
Warren Buffett, Berkshire’s chairman and chief executive, has for years lamented the challenge of finding acquisition targets that are large enough to move the needle for Berkshire /zigman2/quotes/200060694/composite BRK.B -0.77% and are reasonably priced.
While Berkshire has a long history of outperforming the stock market, the company has underperformed the S&P 500’s total return in recent years. The company’s stock rose 11% in 2019, the company said, compared with a 31.5% total return in the S&P 500, including dividends— Berkshire’s biggest underperformance since 2009.
“The opportunities to make major acquisitions possessing our required attributes are rare,” Buffett said in an annual letter to shareholders also released Saturday.
Nevertheless, he said, shareholders should not be worried about the future of Berkshire after the 89-year-old Buffett or his 96-year-old business partner, Berkshire Vice Chairman Charlie Munger, die. “Your company is 100% prepared for our departure,” Buffett said.
The Omaha, Neb., conglomerate reported net earnings of $29.2 billion, or $17,909 per Class A share equivalent, up from a loss of $25.4 billion, or $15,467 a share, the year before. Berkshire’s earnings a year ago were dragged down by an unexpected write-down at Kraft Heinz Co.