Berkshire Hathaway (NYSE: BRK-B) stock surged more than 4% during midday trading on Monday after the Warren Buffett-led conglomerate unveiled record operating earnings for 2024. The multinational powerhouse credited its standout performance to a thriving insurance sector and a hefty boost in investment income. Meanwhile, the company’s cash reserves reached a record high of $334.20 billion in the fourth quarter.
In addition, Buffett hinted at the future, informing investors that Greg Abel, his chosen successor, will soon step in as CEO and take over writing the annual letter.
Berkshire reported that its operating earnings—which exclude investment gains and losses—leaped 27% to $47.4 billion for the full year, up from $37.4 billion in 2023. The fourth quarter delivered even stronger results, with operating earnings soaring 71% to $14.5 billion. Earnings per share reached $10,102 in Q4, smashing Wall Street’s consensus estimate of $6.932.
The conglomerate’s insurance underwriting profit more than doubled in 2024, reaching $9 billion, thanks to a remarkable turnaround at auto insurer GEICO. Meanwhile, investment income from insurance operations climbed 43% to $13.7 billion, as higher interest rates amplified returns on the company’s cash piles.
Net earnings attributable to shareholders slipped 7.5% to $89 billion for the year, largely due to smaller investment gains compared to 2023.
Analysts at Keefe, Bruyette & Woods wasted no time celebrating the news. “We expect this earnings beat and GEICO’s impressive underwriting performance to drive BRK shares higher today,” they stated. The firm promptly raised its 2025 earnings projections and lifted its price target for Berkshire Class A shares to $775,000 from $750,000.
Separately, Analysts at UBS chimed in with a positive outlook. “We continue to view BRK shares as a compelling pick in an uncertain economic climate,” they said. “Insurance fundamentals are solid, and profit margins look clear.” They pegged Berkshire’s stock at a modest 1% premium to its intrinsic value.
In terms of performance, the report revealed that in 2024, Berkshire Hathaway (NYSE: BRK-B) beat expectations, despite 53% of its 189 operating businesses reporting a decline in earnings. The company benefited from a significant gain in investment income as Treasury Bill yields improved, and its holdings of these short-term securities increased substantially.
The conglomerate’s railroad and utility operations—its two largest non-insurance units—also posted higher aggregate earnings, though the company noted there’s still work to do in those areas.
The company paid a record $26.8 billion in corporate income taxes to the U.S. government in 2024, an amount Buffett pointed out equals “about 5% of what all of corporate America paid.”
In his annual letter to shareholders, Buffett praised GEICO CEO Todd Combs for reshaping the auto insurer:
“In five years, Todd Combs has reshaped GEICO in a major way, increasing efficiency and bringing underwriting practices up to date.”
He also highlighted Berkshire’s growing investments in five major Japanese trading companies, calling them “very long-term” holdings with the potential to expand further.
Buffett also issued a stark warning about inflation, stating,
“Paper money can see its value evaporate if fiscal folly prevails.”
He continued,
“In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency.”
Buffett wrapped up his letter with a firm stance on his investment philosophy.
“Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”
