nyse brk b financials
NYSE BRK.B Financials
What do your car insurance, the batteries in your remote, and a Dairy Queen Blizzard have in common? They are all part of one giant company: Warren Buffett’s Berkshire Hathaway. But looking it up reveals two stocks, BRK.A and BRK.B, which can be confusing.
The easiest way to understand the BRK.A vs BRK.B stock differences is to think of it like a pizza. The original Berkshire Hathaway stock, BRK.A, is the entire, uncut party pizza—currently costing more than a new house at over $600,000. For most people, that’s just not on the menu.
That’s why the company created its NYSE BRK.B stock. It’s an affordable single slice of that exact same pizza, trading for around $400. As a regular investor, this is the share of Berkshire Hathaway stock you would actually interact with, giving you a piece of the pie without having to buy the whole thing.
What Kind of Company is Berkshire Hathaway, Anyway?
Unlike a company like Apple that designs and sells iPhones, Berkshire Hathaway doesn’t really make a single “thing.” Instead, it’s a holding company. Its main job is to own a diverse collection of other businesses, not to manufacture a specific product.
Think of Berkshire as a giant shopping basket: its business is to acquire and “hold” other companies. These businesses, called subsidiaries, operate mostly on their own and send their profits back up to the parent company.
You’re probably familiar with many of Berkshire Hathaway’s major holdings without even realizing it. The collection includes household names like:
- GEICO (Car Insurance)
- Duracell (Batteries)
- Dairy Queen (Fast Food & Ice Cream)
- See’s Candies (Chocolates)
- BNSF Railway (One of America’s largest railroads)
The Profit Story: How Does This Giant Actually Make Money?
With dozens of different businesses in its basket, tracking Berkshire’s health can seem complicated. The starting point is simple: add up all the money brought in from every subsidiary, from GEICO insurance premiums to BNSF shipping fees. This grand total is the company’s revenue. But just like your own budget, what matters most is the profit left over after all the bills are paid.
For Berkshire, the most important number is Operating Earnings. This is the profit generated by its actual businesses—the railroads, power plants, and candy makers. Warren Buffett emphasizes this figure because it reflects the real-world performance of the companies Berkshire owns. It’s the truest measure of their fundamental health and a key focus in any Berkshire Hathaway financial performance analysis.
However, financial news often highlights a different, more volatile number: Net Income. This figure includes operating earnings but also adds something tricky: the “paper” gains or losses on Berkshire’s massive stock portfolio. Think of it like your home’s value changing on Zillow; you haven’t sold anything or seen any cash, but the value on paper has shifted.
This distinction is crucial. A headline screaming about a huge quarterly loss for Berkshire might simply mean its stock investments (like Apple) had a down month, even if its operating businesses were doing great. By focusing on the steady growth of operating earnings, you can look past the stock market’s daily mood swings and see the real story of BRK.B’s underlying strength.
The Company Snapshot: What Berkshire Owns vs. What It Owes
While profits tell the story of a company’s performance over time, the Balance Sheet gives you a financial snapshot for a single moment. It answers a very simple question: what does the company own versus what does it owe? To understand the Berkshire Hathaway balance sheet, think of your own household. Your house, car, and savings are Assets (what you own). Your mortgage and car loan are Liabilities (what you owe). It’s the same idea for a giant like Berkshire, just on a much larger scale.
Looking at Berkshire’s assets, one item consistently grabs headlines: a colossal pile of cash. This legendary cash hoard, often totaling more than $150 billion, functions as an unmatched financial fortress. While other companies might worry about paying their bills during a recession, Berkshire sits on an enormous safety net, giving it extreme stability. This is why analysts pay close attention to Berkshire’s cash flow statement—to see how that fortress is being supplied.
However, this cash isn’t just for playing defense. It’s also Berkshire’s ultimate offensive weapon. Having that much cash on hand allows Warren Buffett to be patient and then strike when opportunities arise, buying stocks or entire companies when others are forced to sell. But how does a company that makes batteries and ice cream build up such an extraordinary war chest? The answer lies in the engine room of the whole operation.
The Secret Weapon: Why an Insurance Company is Berkshire’s Engine
That engine room is, surprisingly, the insurance business. Think about how you pay for car insurance with a company like GEICO (one of Berkshire’s largest holdings). You pay your premium upfront, but you might not file a claim for months, years, or maybe ever. During that time, the insurance company gets to hold onto your money.
Now, multiply that effect by millions of policyholders. The result is a vast, ever-replenishing pool of cash that doesn’t belong to Berkshire but which it gets to temporarily manage. This concept, known as insurance float, is the key to Berkshire Hathaway’s financial power. It’s the money collected from customers that will eventually be used to pay out future claims.
For Berkshire, this float is the ultimate financial advantage. It essentially functions as a gigantic, interest-free loan from its policyholders. While you might pay interest on a car loan or mortgage, Berkshire gets to use this massive sum of money at no cost, and even better, it sometimes makes a profit from the insurance operations themselves.
This is where Warren Buffett’s expertise truly shines. He takes this enormous, cost-free “loan” and invests it, buying stocks and entire companies that generate their own profits. The insurance float provides the fuel that powers the acquisition of everything else, from railroads to candy makers, creating a powerful cycle of growth.
What This All Means: How to Think About BRK.B’s Future
Instead of getting lost in dense financial reports, you can evaluate the company’s health like a savvy investor by asking three straightforward questions the next time you see a headline.
Your Berkshire Health Checklist:
- Are the operating earnings growing?
- Is the cash pile still huge?
- Are the insurance businesses running well (not losing money on claims)?
While Berkshire Hathaway’s stock performance has historically outpaced the S&P 500, this checklist gives you the power to assess its future outlook for yourself. It’s your tool for deciding if the company’s famous stability remains, turning complex news about a potential long-term investment into simple, confident insight.
