Berkshire Hathaway Reports Significant Q4 Profit Surge
On Saturday, Berkshire Hathaway unveiled impressive growth in its fourth-quarter operating profits, primarily fueled by its insurance sector, while also achieving record cash holdings.
Under the leadership of Warren Buffett, the conglomerate reported a remarkable 71% increase in operating profits, totaling $14.527 billion during the final three months of 2024. This surge is largely attributed to a staggering 302% rise in insurance underwriting profits compared to the previous year, reaching $3.409 billion. Additionally, investment income from insurance operations grew by approximately 50% to $4.088 billion.
For the entire year, Berkshire Hathaway’s operating profits increased by 27%, culminating in $47.437 billion.
Despite a challenging landscape where 53% of its 189 operating businesses experienced a decline in profits, Berkshire outperformed expectations in 2024. Buffett highlighted this in his annual letter to shareholders, stating, “We benefited from a significant increase in investment income, as treasury bond yields improved and our positions in these short-term securities grew considerably.”
Berkshire Hathaway also cautioned that the recent wildfires in Southern California could result in a pre-tax loss of approximately $1.3 billion for its insurance operations.
By the end of 2024, Berkshire’s cash reserves soared to $334.2 billion, up from $325.2 billion at the conclusion of the third quarter. This liquidity boost occurs as Buffett continues his search for substantial investment opportunities.
In his annual correspondence, Buffett defended the company’s substantial cash holdings, asserting, “Despite what some may perceive as an unusual monetary environment for Berkshire, the vast majority of our funds remain invested in equities, and this strategy will not change. While our equity holdings declined from $354 billion to $272 billion last year, the underlying value of our investments has grown slightly, significantly surpassing the value of our trading portfolio.” He reassured shareholders, “Berkshire’s shareholders can be confident that we will continue to invest the majority of their funds into stocks.”
In 2024, Class A shares of Berkshire Hathaway surged by over 25%.
