Berkshire Hathaway Inc. achieved record operating profits in 2024, despite a dip in overall earnings due to a significant drop in investment income. The company, led by Warren Buffett for 59 years, reported a 71% surge in operating earnings for Q4, reaching $14.53 billion (A$22.7 billion). For the full year, operating earnings climbed 27% to $47.44 billion.
However, net earnings fell by 48% in Q4 to $19.69 billion (A$30.8 billion) and by 7.5% for the year, totaling $88.99 billion. This decline was largely attributed to an 82% drop in investment income in Q4, which fell to $5.17 billion, and a 29% decrease for the year to $41.56 billion.
Buffett, the 94-year-old Chairman and CEO, acknowledged the strong performance but noted that 53% of the company’s 189 operating businesses saw 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 explained.
He highlighted Berkshire’s insurance business, particularly GEICO, which saw a “spectacular” improvement in 2024, though further progress was still expected. Buffett also emphasized that operating earnings are the best measure of performance, as they exclude capital gains or losses on investments.
Additionally, Berkshire’s railroad and utility operations showed improved earnings, though Buffett noted that there was still significant potential for further growth.
Despite challenges, Berkshire Hathaway continues to perform solidly, with its Class B shares (NYSE: BRK.B) closing at $478.74 on Friday, reflecting a market capitalization of $1.03 trillion.
