Berkshire Hathaway reported a significant increase in fourth-quarter earnings on February 22, 2025, following its annual shareholders meeting in Omaha, Nebraska. The company, led by Warren Buffett, announced a 71% rise in operating profit, reaching $14.527 billion, largely due to a surge in insurance underwriting.
- Berkshire Hathaway's Q4 operating profit surged 71%
- Insurance underwriting profits jumped 302%
- Cash holdings reached $334.2 billion
- Buffett defends large cash reserves
- Investment gains fell sharply in Q4
- Total earnings decreased 47% year-over-year
Buffett noted that despite the earnings growth, 53% of Berkshire’s 189 operating businesses experienced a decline in earnings. The company also reported record cash holdings of $334.2 billion, as it continues to seek investment opportunities.
Berkshire Hathaway’s impressive fourth-quarter earnings were primarily fueled by a remarkable 302% increase in insurance underwriting profits, which reached $3.409 billion. Additionally, insurance investment income rose nearly 50% to $4.088 billion. For the entire year, operating earnings increased 27% to $47.437 billion, showcasing the strength of its core businesses despite challenges faced by many subsidiaries.
Buffett highlighted that the company’s cash reserves grew from $325.2 billion at the end of the third quarter to $334.2 billion by year-end 2024. This increase reflects a strategic decision to maintain liquidity while navigating a challenging investment landscape. Buffett reassured shareholders that the majority of their funds remain invested in equities, despite a reduction in marketable equity holdings from $354 billion to $272 billion.
Investment gains for the fourth quarter slowed significantly, dropping to $5.167 billion from $29.093 billion in the same period last year. Berkshire Hathaway’s total earnings for the quarter were reported at $19.694 billion, down 47% from $37.574 billion a year earlier. The company also faced an estimated pre-tax loss of about $1.3 billion due to wildfires in Southern California impacting its insurance business.
In summary, while Berkshire Hathaway achieved notable growth in operating profit, the overall financial picture was mixed, with declines in earnings for many of its businesses and a substantial drop in investment gains. The company continues to hold a strong cash position as it looks for future investment opportunities.
Overall, Berkshire Hathaway’s fourth-quarter results reflect a complex landscape of growth in certain sectors, particularly insurance, while also highlighting challenges in others, emphasizing the importance of strategic investment management.
