Berkshire Hathaway Beats Forecast, Has $20B in the Bank

Warren Buffett continues to light the way for investors, improving financial results in a tough year.  In his annual letter to stockholders, he has an optimistic tone for the coming year. 

OMAHA, Neb. (AP) -- Warren Buffett's Berkshire Hathaway reported a 43 percent jump in fourth-quarter earnings Saturday largely because of strong performance at its railroad business and a paper gain of $1.4 billion on the company's derivative contracts and investments.
Buffett said in his annual letter to shareholders that the purchase of the Burlington Northern Santa Fe railroad was Berkshire's highlight of 2010.
Berkshire reported net income of $4.38 billion, or $2,656 per share of its primary, Class A stock. That's up from the $3.1 billion net income, or $1,969 per Class A share, a year ago. It's also higher than the $1,695 per Class A share expected by analysts surveyed by FactSet.
Revenue grew nearly 20 percent to $36.2 billion from $30.2 billion a year earlier.

Buffett said Berkshire's $26.7 billion acquisition of BNSF last February is working out better than he expected. The railroad added $2.2 billion to Berkshire's net income in 2010.
In his annual letter to investors, Buffett wrote:  "Earlier I explained just how important railroads are to our country’s future. Rail moves 42% of America’s inter-city freight, measured by ton-miles, and BNSF moves more than any other railroad – about 28% of the industry total. A little math will tell you that more than 11% of all inter-city ton-miles of freight in the U.S. is transported by BNSF."


Revenue for the full year was $136.2 billion, up 21 percent from $112.5 billion a year earlier.
Buffett said he's looking for more big acquisitions to boost Berkshire's earnings power.  Berkshire Hathaway continues to bank $20 billion dollars in cash.