Berkshire Hathaway’s profit jumps 71%, cash holdings hit record

Berkshire Hathaway Inc. on Saturday reported a massive increase in fourth-quarter operating profit, driven largely by its insurance business, while its cash holdings surged to record levels.

The Warren Buffett-led conglomerate said its operating profit, which includes earnings from wholly-owned businesses, rose 71% to $14.527 billion in the final three months of 2024. That was driven by a massive 302% surge in insurance underwriting compared to the prior-year period, to $3.409 billion. Insurance investment income also rose about 50% to $4.088 billion.

Operating profit also increased 27% for the full year, to $47.437 billion. In 2024, Berkshire outperformed its expectations, even as 53% of its 189 operating businesses reported earnings declines. “We were helped by a large expected gain in investment income, as Treasury yields improved and our holdings of these highly liquid short-term securities increased significantly,” Buffett, Berkshire’s chairman and CEO, said in his annual letter to shareholders. “Our insurance business also posted a significant increase in earnings, led by the performance of GEICO.” To be sure, Berkshire has warned that the wildfires in Southern California will result in a pretax loss of about $1.3 billion for its insurance business.

Berkshire Hathaway ended 2024 with $334.2 billion in cash, up from $325.2 billion at the end of the third quarter. The cash boost comes as Buffett struggles to find his next big investment target. In his annual letter, Buffett defended the large cash holdings, saying: “Despite what some commentators now see as Berkshire’s unusual cash position, the vast majority of your money remains in stocks, and that preference will not change. While our ownership in tradable stocks moved down last year from $354 billion to $272 billion, the value of our unlisted controlled stocks increased somewhat and remains significantly larger than the value of the tradable portfolio.” He added: “Berkshire shareholders can rest assured that we will continue to invest a large majority of their money in stocks.” The company’s Class A shares are up more than 25% in 2024.

In 2024, Berkshire performed better than it expected, even though 53% of its 189 operating businesses reported earnings declines. “We were helped by a large expected gain in investment income, as Treasury yields improved and our holdings of these highly liquid short-term securities increased significantly. Our insurance business also posted a significant increase in earnings, led by the performance of GEICO,” Buffett, Berkshire’s chairman and CEO, said in his annual letter to shareholders.

To be sure, Berkshire has warned that the wildfires in Southern California will result in a pretax loss of about $1.3 billion for its insurance business.

Berkshire Hathaway ended 2024 with $334.2 billion in cash, up from $325.2 billion at the end of the third quarter. The cash boost comes as Buffett struggles to find his next big investment target.

In his annual letter, Buffett defended the large cash holdings, saying: “Despite what some commentators currently see as Berkshire’s unusual cash position, the vast majority of your money remains in stocks, and that preference will not change. While our ownership in tradable shares moved down last year from $354 billion to $272 billion, the value of our unlisted controlled shares increased somewhat and remains significantly larger than the value of the tradable portfolio,” he added. “Berkshire shareholders can rest assured that we will continue to invest a significant majority of their money in equities.” The company’s Class A shares are up more than 25% in 2024.