Warren Buffett walks the ground forward of the Berkshire Hathaway Annual Shareholders Assembly in Omaha, Nebraska on Could 3, 2024.
David A. Grogen | CNBC
Berkshire Hathaway on Saturday reported an enormous surge in fourth-quarter earnings from its working companies, pushed largely by insurance coverage, whereas its money holdings swelled to file ranges.
The Warren Buffett-led conglomerate mentioned its working revenue — which encompasses earnings from the corporate’s wholly owned companies — skyrocketed 71% to $14.527 billion through the ultimate three months of 2024. That was led by a whopping 302% leap in insurance coverage underwriting from the year-earlier interval to $3.409 billion. Insurance coverage funding earnings additionally ballooned by practically 50% to $4.088 billion.
Working earnings additionally popped 27% for the total yr, coming in at $47.437 billion.
“In 2024, Berkshire did higher than I anticipated although 53% of our 189 working companies reported a decline in earnings. We have been aided by a predictable giant acquire in funding earnings as Treasury Invoice yields improved and we considerably elevated our holdings of those highly-liquid short-term securities,” Buffett, chairman and CEO of Berkshire, mentioned in his annual letter to shareholders. “Our insurance coverage enterprise additionally delivered a serious enhance in earnings, led by the efficiency of GEICO.”
To make sure, Berkshire warned that the wildfires that broke out in Southern California will result in an estimated pre-tax lack of about $1.3 billion for its insurance coverage enterprise.
Money holdings high $330 billion
Berkshire Hathaway ended 2024 with $334.2 billion in money, up from $325.2 billion on the finish of the third quarter. This fortress comes as Buffett struggles to seek out his subsequent large funding goal.
In his annual letter, Buffett defended the big money holdings.
“Regardless of what some commentators presently view as a unprecedented money place at Berkshire, the nice majority of your cash stays in equities. That choice will not change. Whereas our possession in marketable equities moved downward final yr from $354 billion to $272 billion, the worth of our non-quoted managed equities elevated considerably and stays far larger than the worth of the marketable portfolio,” he mentioned, including that “Berkshire shareholders can relaxation assured that we are going to eternally deploy a considerable majority of their cash in equities.”
Berkshire Hathaway 1-year chart
Funding good points slowed sharply within the fourth quarter to $5.167 billion from $29.093 billion within the year-earlier. Certainly, Berkshire pared inventory investments through the yr. Notably, it offered a bit of its Apple stake by way of 2024.
To make sure, Berkshire at all times notes in its earnings releases that: “The quantity of funding good points/losses in any given quarter is normally meaningless and delivers figures for web earnings per share that may be extraordinarily deceptive to traders who’ve little or no information of accounting guidelines.”
Berkshire’s whole earnings for the quarter got here in at $19.694 billion, a 47% lower from the year-earlier interval of $37.574 billion. For the total yr, the corporate’s backside line got here in at $88.995 billion, down 7.5% from $96.223 billion in 2023.
