Berkshire Hathaway Inc. has delivered remarkable financial results for the fourth quarter and full year of 2024, with a stunning 71% increase in operating earnings and net earnings of $19.7 billion in Q4.
The conglomerate, under Warren Buffett's leadership, has continued to see strong performance from its insurance and investment businesses, with insurance underwriting and investment income both delivering significant gains.
This performance is a direct result of the continued rise in interest rates, which have enhanced Berkshire’s investment income, coupled with strong performance from GEICO and other segments.
The Q4 earnings report highlighted operating earnings of $14.5 billion, reflecting an impressive recovery across various business units. The company’s insurance underwriting saw a remarkable fourfold increase, reaching $3.4 billion in operating income. In addition, insurance investment income surged by 48% to $4.1 billion, benefiting from higher interest rates.
In terms of investment gains, Berkshire Hathaway reported $5.2 billion in realized after-tax gains for the fourth quarter, adding to a total of $79.6 billion for the year. However, the firm also experienced substantial unrealized losses of $38.1 billion for the year, stemming from fluctuations in equity security investments. This showcases the volatile nature of equity investments but doesn't reflect operational performance, which remains strong.
Berkshire Hathaway also repurchased $2.9 billion of its shares during 2024, reflecting Buffett’s focus on maintaining shareholder value and discipline in capital deployment. The company’s cash reserves increased to $334.2 billion, marking the 10th consecutive quarter of growth, a sign of both its strong earnings and prudent cash management.
Warren Buffett made an eyebrow-raising claim in the earnings report, stating that Berkshire Hathaway paid more taxes than some of the world’s largest tech firms, such as Apple, Google, and Amazon, despite their multi-trillion-dollar valuations.
According to Buffett, Berkshire made four payments totaling $26.8 billion to the IRS, which amounts to about 5% of what corporate America paid in taxes.
This could raise questions: Why is Berkshire paying more taxes than tech giants? The difference lies in the tax structures employed by these tech companies. Many tech firms use tax-saving strategies such as offshoring profits, tax credits, and intellectual property deductions to minimize their tax burdens.
In contrast, Berkshire Hathaway’s operations in insurance, manufacturing, and utilities are taxed at higher rates, as they involve tangible assets that are easier to assess for tax purposes.
Furthermore, Berkshire’s large domestic and international operations expose it to more tax obligations across different jurisdictions, contributing to its higher tax payments.
Berkshire Hathaway’s business operations span a variety of sectors, making it one of the most diversified conglomerates in the world.
While insurance remains the company’s core business, the firm also owns significant stakes in companies like BNSF Railway and Berkshire Hathaway Energy, which saw strong performances in Q4, contributing to the company’s overall success.
BNSF, Berkshire’s railroad business, posted $1.3 billion in operating income for Q4, while Berkshire Hathaway Energy generated $729 million in operating earnings. Both segments continue to be reliable profit-generators for the company, contributing to its strong, stable cash flow.
Berkshire’s non-controlled businesses, which include a variety of industries, also saw an uptick in performance, contributing $695 million in operating income for Q4 and $1.5 billion for the year.
With record profits, impressive cash reserves, and the continued performance of its key businesses, many investors may be wondering if now is a good time to invest in Berkshire Hathaway.
Given the company’s strong financial position, consistent growth, and resilient business model, Berkshire Hathaway remains a solid long-term investment for those seeking stability and value. However, it’s essential to consider the potential volatility in the stock market, particularly with fluctuations in interest rates and equity investments.
Warren Buffett’s approach to investing in companies with strong, sustainable growth and competitive advantages continues to be at the core of Berkshire’s investment strategy. While the rise in interest rates and increased taxes could create short-term pressures, the company’s diversified portfolio and disciplined approach to investments suggest that it will continue to thrive in the long run.
Looking forward, Berkshire Hathaway’s diverse business model and its ability to capitalize on growth opportunities in various sectors place it in a strong position to navigate any economic challenges.
However, economic headwinds, including inflation, wildfire losses, and market volatility, could create risks for the company.
Buffett’s legendary approach to value investing, with a focus on strong businesses and prudent capital management, suggests that Berkshire Hathaway will remain a key player in the global economy.
Investors should carefully consider the company’s growth strategy, its substantial insurance float, and its investment in high-quality companies when assessing its future prospects.
BERKSHIRE HATHAWAY INC.
NEWS RELEASE
FOR IMMEDIATE RELEASE
February 22, 2025
Omaha, NE (BRK.A; BRK.B) –
Berkshire’s operating results for the fourth quarter and full year of 2024 and 2023 are summarized in the following paragraphs. However, we urge investors and reporters to read our 2024 Annual Report, which has been posted at www.berkshirehathaway.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.
Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the fourth quarter and full year of 2024 and 2023 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).
| Fourth Quarter | Full Year | |
|---|---|---|
| 2024 | 2023 | |
| Net earnings attributable to Berkshire shareholders | $19,694 | $37,574 |
| Net earnings includes: | ||
| Investment gains/losses | $5,167 | $29,093 |
| Operating earnings | $14,527 | $8,481 |
| Net earnings attributable to Berkshire shareholders | $19,694 | $37,574 |
| Net earnings per average equivalent Class A Share | $13,695 | $26,043 |
| Net earnings per average equivalent Class B Share | $9.13 | $17.36 |
| Average equivalent Class A shares outstanding | 1,438,022 | 1,442,785 |
| Average equivalent Class B shares outstanding | 2,157,034,121 | 2,164,177,636 |
Note: Per share amounts for the Class B shares are 1/1,500th of those shown for the Class A.
Generally Accepted Accounting Principles (“GAAP”) require that we include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our earnings statements. In the table above, investment gains/losses in 2024 include after-tax gains of $2.1 billion in the fourth quarter and after-tax losses of $38.1 billion in the full year and in 2023 include after-tax gains of $29.5 billion in the fourth quarter and $53.0 billion in the full year due to changes during the fourth quarter and the full year in the unrealized gains that existed in our equity security investment holdings.
Investment gains/losses in 2024 include after-tax realized gains of $3.1 billion in the fourth quarter and $79.6 billion for the full year and in 2023 include after-tax realized losses on sales of investments of $330 million in the fourth quarter and after-tax realized gains of $3.6 billion in the full year. In 2023 investment gains also include a net remeasurement gain of approximately $2.4 billion related to Berkshire’s acquisition of an additional 41.4% interest in Pilot Travel Centers.
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.
| Fourth Quarter | Full Year | |
|---|---|---|
| 2024 | 2023 | 2024 |
| Insurance-underwriting | $3,409 | $848 |
| Insurance-investment income | $4,088 | $2,759 |
| BNSF | $1,278 | $1,355 |
| Berkshire Hathaway Energy Company | $729 | $632 |
| Other controlled businesses | $3,262 | $3,270 |
| Non-controlled businesses | $695 | $421 |
| Other* | $1,066 | ($804) |
| Operating earnings | $14,527 | $8,481 |
Includes foreign currency exchange gains related to non-U.S. Dollar denominated debt of approximately $1.2 billion in the fourth quarter and $1.1 billion in the full year 2024 and in 2023 includes foreign currency exchange losses of approximately $684 million in the fourth quarter and gains of approximately $211 million in the full year.
Berkshire used approximately $2.9 billion to repurchase Berkshire shares during 2024. On December 31, 2024 there were 1,438,223 Class A equivalent shares outstanding. At December 31, 2024, insurance float (the net liabilities we assume under insurance contracts) was approximately $171 billion, an increase of $2 billion since yearend 2023.
This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein. Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information. That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment gains/losses.
Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process. Moreover, as previously described, under applicable GAAP accounting requirements, we are required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our periodic earnings statements. In sum, investment gains/losses for any particular period are not indicative of quarterly business performance.
Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, services, and retailing. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.
Certain statements contained in this press release are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and actual results may differ materially from those forecasted.
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Contact
Marc D. Hamburg
402-346-1400
