(Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N on Saturday posted a 23% decrease in quarterly operating profit, while soaring prices in stock holdings such as Apple Inc AAPL.O enabled the conglomerate to smash its old record for full-year earnings.

FILE PHOTO: Berkshire Hathaway CEO Warren Buffett talks to reporters prior to the Berkshire annual meeting in Omaha, Nebraska May 2, 2015. REUTERS/Rick Wilking

In his annual letter to Berkshire shareholders, Buffett defended Berkshire’s foray into stocks, which comes amid a four-year drought since its last major acquisition that has left Berkshire sitting on $128 billion of cash.

Berkshire did step up repurchases of its own stock, buying back roughly $2.2 billion in the quarter. Repurchases totaled $5 billion for the full year.

“I am delighted with the increased commitment to share repurchases,” said Thomas Russo, a partner at Gardner, Russo & Gardner, which invests $13 billion, of which 13% is in Berkshire. “It may be a very large arrow in Berkshire’s quiver to increase intrinsic value on a per-share basis.”

Nonetheless, while the BNSF railroad and Berkshire Hathaway Energy units showed improvement, reinsurance operations weighed on operating results, and the Geico car insurer posted “subpar performance” as loss claims eclipsed premium growth, according to Cathy Seifert, an analyst at CFRA Research.

“The big miss was on the insurance front, though energy and railroads were stronger,” Seifert said. It will be interesting see the impact of coronavirus on freight traffic in the first quarter and beyond.”

Fourth-quarter operating profit fell to $4.42 billion, or approximately $2,720 per Class A share, from $5.72 billion, or about $3,484 per share.

Berkshire did not write down its 26.6% stake in Kraft Heinz Co KHC.O, which is struggling to rebound from years of cost-cutting amid changing consumer tastes, though its market value is well below the $13.8 billion carrying cost on Berkshire's balance sheet.

Net income, reflecting stock gains, totaled $29.16 billion, compared with a net loss of $25.39 billion a year earlier.

For all of 2019, net income totaled $81.42 billion, topping the record $44.94 billion for 2017, when Berkshire benefited from a lower U.S. corporate tax rate.

Such huge swings stem from an accounting rule requiring Berkshire to report paper gains and losses from its stock holdings with net income.

Buffett wrote that companies whose stocks Berkshire owns are generating returns that are “remarkable under any circumstances,” especially compared with returns on bonds.

Apple soared 86% in 2019 and 31% in the fourth quarter alone, leaving Berkshire with a $73.7 billion year-end stake.

Berkshire’s stock was a laggard in 2019, rising 11% compared with a 31.5% gain in the Standard & Poor’s 500 including dividends, in part reflecting the drag from the cash stake.