Lower tax rate fuels record profit for Buffett’s Berkshire
Fourth-quarter net income increased roughly fivefold to $32.55 billion, or $19,790 per Class A share, from $6.29 billion, or $3,823 per share, a year earlier.
Quarterly operating profit for the Omaha, Nebraska-based conglomerate fell 24 per cent to $3.34 billion from $4.38 billion.
Berkshire attributed roughly $29.11 billion of its net income to the reduction of the US corporate tax rate, to 21 per cent from 35 per cent, that President Donald Trump signed into law in December.
Book value per Class A share, which reflects assets minus liabilities and which Buffett considers a good yardstick for Berkshire’s intrinsic worth, was $211,750 at the end of the year, up 13 percent from three months earlier.
This also benefited from the tax law change.
For all of 2017, Berkshire's net income rose 87 per cent to $44.94 billion. Operating profit, however, fell 18 per cent to $14.46 billion, hurt by a rare loss from insurance underwriting.
Berkshire's Class A shares closed at $304,020.01 on Friday, and its Class B shares closed at $202.76.
Both are up a little over 2 per cent this year, but are down nearly 7 per cent from their record highs set on January 29.