Berkshire Hathaway's Operating Earnings Surge 71% in Q4 2024

2025-02-23 companies

Omaha, Sunday, 23 February 2025.
Berkshire Hathaway reported a significant 71% increase in operating earnings for Q4 2024, reaching $14.5 billion, driven by improved insurance underwriting and higher Treasury Bill yields.

Record Performance and Insurance Gains

Berkshire Hathaway (NYSE: BRK.A, BRK.B) posted operating earnings of $14.527 billion in the fourth quarter of 2024, a dramatic increase from $8.481 billion in the same period of 2023 [1][2]. The conglomerate’s impressive performance was largely driven by a remarkable 302% surge in insurance underwriting and a 48% increase in insurance investment income [1]. This contributed to full-year operating earnings of $47.437 billion, marking a 27.007% increase from 2023’s $37.350 billion [2].

Cash Position and Investment Strategy

The company’s cash reserves reached a historic high of $334.2 billion by the end of 2024, up from $325.2 billion at the end of Q3 2024 [1]. Warren Buffett, Berkshire’s Chairman and CEO, acknowledged that while 53% of the company’s 189 operating businesses reported declining earnings, the overall performance exceeded expectations [1]. The increased earnings were substantially bolstered by higher yields on Treasury Bills, where Berkshire has significantly increased its holdings [3]. Investment gains, however, showed a marked slowdown in Q4 2024, dropping to $5.167 billion compared to $29.093 billion in the same quarter of the previous year [1].

Portfolio Adjustments and Market Activity

During 2024, Berkshire made notable adjustments to its investment portfolio, including reducing its stake in Apple and completely divesting its position in Ulta Beauty [4]. The company’s ownership in marketable equities decreased from $354 billion to $272 billion throughout the year [2]. Despite these reductions, Berkshire maintained its long-term commitment to equity investments, with Buffett assuring shareholders that ‘Berkshire will forever deploy a substantial majority of their money in equities’ [1]. The company’s conservative approach to share buybacks continued, with repurchases totaling approximately $2.9 billion during 2024 [2].

Insurance Operations and Future Outlook

The insurance segment proved particularly strong, with investment income rising to $4.1 billion in the fourth quarter, representing a 48% increase driven by higher interest rates [6]. The company’s insurance float, which represents premium money that Berkshire can invest before paying claims, grew by $2 billion to reach approximately $171 billion by the end of 2024 [2]. Looking ahead, Berkshire’s robust cash position and strong insurance operations suggest the company remains well-positioned for potential investment opportunities [1][2].

Sources

earnings berkshire hathaway