Berkshire Hathaway's operating profit surged by an impressive 71% to reach $14.5 billion in the fourth quarter, driven largely by robust insurance underwriting performance. The company's insurance underwriting profits experienced a significant leap, skyrocketing 302% from the previous year to $3.4 billion. This financial prowess led to a nearly 4% rise in Berkshire's Class A shares on Monday following the earnings announcement.
The earnings report highlighted a slowdown in investment gains from Berkshire's portfolio holdings, which dropped to $5.2 billion in the fourth quarter. Despite this, the company made strategic decisions regarding its stock holdings, selling more equities than it purchased for the ninth consecutive quarter. In total, Berkshire's equity sales exceeded $134 billion in 2024, while no shares were repurchased in the fourth quarter and into early 2025.
Berkshire's cash reserves swelled to a record $334.2 billion, up from $325.2 billion at the end of the third quarter. This vast cash pile has left shareholders eagerly awaiting news on potential uses for the funds. Warren Buffett, CEO of Berkshire Hathaway, reassured stakeholders that this accumulation of cash does not signal a reduced interest in acquiring stocks or businesses. He further expressed confidence in his chosen successor, Greg Abel, drawing a comparison to the late Charlie Munger.
In 2024, Berkshire Hathaway achieved a remarkable 25.5% rally, outperforming the S&P 500. The company's stock has continued its upward trajectory, gaining more than 5% so far in 2025. Among its wholly owned businesses are notable entities such as Geico and BNSF Railway.
"Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis," – Bill Stone
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