Warren Buffett, chairman, Berkshire Hathaway
“You really saw the power of Berkshire’s insurance operations and investments,”Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster
Warren Buffett’s Berkshire Hathaway on Saturday posted its third straight record annual operating profit, bolstered by increases in underwriting earnings and investment income in its insurance businesses.
Much of that income came from Berkshire’s enormous cash stake, which ended 2024 at a record $334.2 billion, twice as much as a year earlier.
In his annual letter to Berkshire shareholders, Buffett assured that Berkshire would prefer investing in businesses to holding cash.
But he also said his Omaha, Nebraska-based conglomerate “did better than I expected,” though 53% of its 189 operating businesses posted lower earnings.
He attributed the improvement in part to higher yields on U.S. Treasury bills, and improvement at the Geico car insurer, which benefited from improved pricing and tighter underwriting as loss rates from accidents declined.
“Those were incredible numbers,” said Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, which has owned Berkshire stock since the 1980s.
“You really saw the power of Berkshire’s insurance operations and investments.”
Operating profit rose 27% to $47.44 billion in 2024 from $37.35 billion a year earlier.
Fourth-quarter operating profit also set a record, rising 71% to $14.53 billion, or about $1,010 per Class A share, from $8.48 billion a year earlier, reflecting gains in its insurance operations and from foreign currency changes.
Quarterly net income totaled $19.69 billion, or $13,695 per average equivalent share, as the value of Berkshire’s holdings in Apple , American Express and other stocks increased. For the year, net income totaled $89 billion.
Buffett considers net results misleading because they include gains and losses on investments that Berkshire has not sold and sometimes has no plan to sell.
The increase in Berkshire’s cash stake in 2024 largely came from the sale of $143.4 billion of stock, including 62% of Berkshire’s holdings in Apple and one-third of its stake in Bank of America.
Berkshire has been a net seller of stocks for nine consecutive quarters.
Meanwhile, Berkshire spent just $2.9 billion repurchasing its own stock in 2024. Through February 10, it has conducted no repurchases since last May.
Berkshire’s businesses also include the BNSF railroad, industrial parts and chemical companies, a big real estate brokerage, and retail brands such as Dairy Queen ice cream, Fruit of the Loom underwear and See’s candies.