Berkshire Hathaway Posts Record Profit in 2024
Strong Performance and Record Profits
Warren Buffett’s Berkshire Hathaway has announced its second consecutive annual record operating profit, driven by improved underwriting in its insurance business and higher investment income. The company reported a net income of $96.2 billion, with a significant portion coming from its $354 billion equity portfolio, half of which is invested in Apple.
Insurance Business Success
Berkshire’s insurance businesses, including Geico, performed exceptionally well, with better underwriting quality leading to improved results. This success helped offset declines in profit from other sectors such as the BNSF railroad and Berkshire Hathaway Energy.
Long-Term Outlook and Financial Strength
Despite some challenges in certain sectors, Buffett reassured investors about Berkshire’s long-term health, highlighting the company’s extreme fiscal conservatism and substantial cash reserves of $167.6 billion. Operating profit for the year rose by 21% to $37.4 billion.
Investment Strategy and Cash Reserves
Berkshire’s cash reserves have increased due to a net selling of stocks and a focus on investment income as interest rates rose. The company also repurchased its own stock, spending billions in the process.
Future Investments and Growth
Buffett has been discreetly building new holdings, with speculation pointing towards the bank, insurance, and finance sectors. Berkshire’s diverse portfolio, including investments in Occidental Petroleum Corp, continues to drive growth and income.
Diverse Business Portfolio and Stock Performance
Berkshire’s portfolio includes various businesses such as industrial parts, real estate, and retail brands like Dairy Queen and Fruit of the Loom. The company’s stock has outperformed the market, rising by 16% in 2024 and setting new records.
