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Berkshire numbers 'decent' considering scale of company: Analyst

Berkshire Hathaway (BRK-A, BRK-B) reported blockbuster earnings, with massive cash balances reaching $167.6 billion. CFRA Equity Research Vice President Cathy Seifert joins Yahoo Finance Live to discuss her outlook on the company.

Seifert says "the numbers were decent" considering Berkshire's enormous size. She notes Berkshire has strong insurance, reinsurance and commercial business lines that help drive results. However, she points to potential stock pressure from weaker segments like their utility holdings.

Seifert adds that the annual letter to shareholders "addressed" many investor concerns. But with Berkshire being so large, she notes "it's really difficult to move the needle" for a company of this scale.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.


Editor's note: This article was written by Angel Smith

Video transcript

JOSH LIPTON: Berkshire Hathaway shares pulling back after hitting a record high early in the session. The company reporting a big profit gain in the fourth quarter. The highs of the day. That company was closing in on a $1 trillion market cap.

And joining us now is CFRA vice president of equity research Cathy Seifert. Cathy, it is good to see you. Just looking at these results.

So Berkshire's reporting posts a record, Cathy. 37.4 billion in operating profit. Interesting to get your take, Cathy, on the report. What did you make of it?

CATHY SEIFERT: I thought the numbers were decent. I mean, this is a large company. And for all of 2023, they posted almost a 20% operating revenue growth.

Berkshire has a really good insurance franchise in Geico, and a reinsurance franchise, and as well as a commercial lines franchise. And that really drove results. That plus higher investment income.

I mean, there are some drags on results. And I think one of the reasons why the stock may be a little weak today is some concerns over Berkshire's utilities exposure, and some of the wildfire liability that their utilities subsidiaries have. But all in all, I thought it was a really good quarter and a year.

JULIE HYMAN: Cathy, it's Julie here. What do you make of Warren Buffett's sort of tempering expectations, which I guess is not that unusual for him to do, right? But to say that for a firm of their size to continue to grow at this rate and also to continue to find opportunities is just going to be difficult. Does that something that you think should dissuade investors?

CATHY SEIFERT: No. I mean, I think the letter addressed a number of things that had been speculated whether or not Berkshire was going to buy Occidental Petroleum. He addressed that and said definitively they were not the Japanese trading companies, that they took an equity stake in. There was a question about whether or not they were going to acquire those.

And I also think that Berkshire is trying to tamp down expectations because they are so large. It's really difficult to move the needle when you're this big which isn't to say that they're not going to deploy some of their 160 plus billion in cash into acquisitions. I just think he's trying to tamp down expectations that he's going to make some blockbuster deal.