Berkshire operating earnings surge 71% in fourth quarter, cash hoard balloons to record $334 billion

Berkshire Hathaway on Saturday reported a massive surge in fourth-quarter earnings from its operating businesses, driven in large part by insurance, while its cash holdings swelled to record levels.

The Warren Buffett-led conglomerate said its operating profit — which encompasses earnings from the company's wholly owned businesses — skyrocketed 71% to $14.527 billion during the final three months of 2024. That was led by by a whopping 302% jump in insurance underwriting from the year-earlier period to $3.409 billion. Insurance investment income also ballooned by nearly 50% to $4.088 billion.

Operating earnings also popped 27% for the full year, coming in at $47.437 billion.

"In 2024, Berkshire did better than I expected though 53% of our 189 operating businesses reported a decline in earnings. We were aided by a predictable large gain in investment income as Treasury Bill yields improved and we substantially increased our holdings of these highly-liquid short-term securities," Buffett, chairman and CEO of Berkshire, said in his annual letter to shareholders. "Our insurance business also delivered a major increase in earnings, led by the performance of GEICO."

To be sure, Berkshire warned that the wildfires that broke out in Southern California will lead to an estimated pre-tax 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. This fortress comes as Buffett struggles to find his next big investment target.

In his annual letter, Buffett defended the large cash holdings.

"Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won't change. While our ownership in marketable equities moved downward last year from $354 billion to $272 billion, the value of our non-quoted controlled equities increased somewhat and remains far greater than the value of the marketable portfolio," he said, adding that "Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities."

Berkshire Hathaway 1-year chart

Investment gains slowed sharply in the fourth quarter to $5.167 billion from $29.093 billion in the year-earlier. Indeed, Berkshire pared stock investments during the year. Notably, it sold a chunk of its Apple stake through 2024.

To be sure, Berkshire always notes in its earnings releases that: "The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules."

Berkshire's total earnings for the quarter came in at $19.694 billion, a 47% decrease from the year-earlier period of $37.574 billion. For the full year, the company's bottom line came in at $88.995 billion, down 7.5% from $96.223 billion in 2023.