With most of the fourth quarter of 2012's earnings season behind us, did the Oracle of Omaha put a notch in the "win" column for Berkshire's $77.2 billion portfolio?
Warren Buffett may be the greatest investor alive, but even the Great One (financially speaking) still recognizes earnings season as an important time for investors to take stock of their investments. With earnings already reported for four of Berkshire Hathaway Inc. (NYSE:BRK.A)'s five largest investments , we can take a look at how Buffett's picks fared during the fourth quarter long before the firm releases its annual statements in late February.
5. The Procter & Gamble Company (NYSE:PG)
The second-quarter results for The Procter & Gamble Company (NYSE:PG) were pretty impressive. The company responsible for Tide, Gillette, and Pampers was able to turn a 2% boost in revenue into a 57% increase in profit, when compared to 2011 results. That kind of improvement highlights the efforts taken by P&G to clean up its operations and improve cost savings, after years of criticism for over-expansion internationally -- something that any investor should be excited to see.
Beyond happy investors, P&G CEO Bob McDonald should be walking tall after the earnings release. Since the embattled CEO faced loud opposition to his position atop the company, including calls for his resignation from activist investor Bill Ackman, after reducing forecasts three times last year -- it is a great sign of leadership that the company has returned to meeting and exceeding expectations.
4. American Express Company (NYSE:AXP)
The credit card and personal finance company posted pretty lackluster results from its fourth-quarter operations, but there are still plenty of reasons to be excited about where American Express Company (NYSE:AXP) is headed. The company's revenue only grew 5%, boosted mostly by an 8% increase in card-member spending -- but straggled behind most of its competitors.
AmEx is able to boast one thing among its closest competitors -- a 23% ROI in the fourth quarter. While the company announced planned cuts in its travel department, which would affect its bottom line and boost ROI, the company is clear about its continued focus on investing in the business and moving forward. With an eye to the future and the plans to match, this company should be a favorite among investors.
3. International Business Machines Corp. (NYSE:IBM)
The tech giant's earnings release performed a feat of Herculean effort. On a day when 21 of the 30 stocks that comprise the Dow Jones Industrial Average were seeing red, International Business Machines Corp. (NYSE:IBM)'s boost from its better-than-expected earnings pushed the index higher. With a 6.3% increase in profits, the company outpaced expectations and pleasantly surprised investors.
IBM also increased its earnings outlook for the remainder of 2013. While that may be good news by itself, investors should know that the company's new estimates show 2013 earnings up 8% from 2012 -- a nice chunk of change if IBM meets the estimates. And some new information may just shore up IBM's confidence: within the disappointing GDP figures released today, the data still showed consumer spending was up in the fourth quarter -- with private domestic investment in equipment and software up 12% from the third quarter.