Berkshire Hathaway reports record operating earnings as cash pile swells further

Investing.com -- Warren Buffett's Berkshire Hathaway (NYSE:BRKa) (NYSE:BRKb) reported record operating earnings for 2024, driven by strong performance in its insurance businesses and higher investment income. Meanwhile, the firm's cash position rose to a new high of $334.20 billion in the fourth quarter.

Berkshire's operating earnings, which exclude investment gains and losses, rose 27% to $47.4 billion in 2024, compared to $37.4 billion in 2023. For the fourth quarter, operating earnings jumped 71% to $14.5 billion.

The conglomerate's insurance underwriting profit more than doubled to $9 billion in 2024, led by a turnaround at auto insurer GEICO. Insurance investment income surged 43% to $13.7 billion as higher interest rates boosted returns on Berkshire's cash pile.

Net earnings attributable to shareholders fell 7.5% to $89 billion for the full year, mainly due to lower investment gains compared to 2023.

Berkshire paid a record $26.8 billion in corporate income taxes to the U.S. government in 2024, which Buffett highlighted as "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."

Buffett also discussed Berkshire's growing investments in five major Japanese trading companies, saying the holdings are "for the very long term" and may increase over time.

The 94-year-old CEO reiterated his preference for equity investments over cash, stating "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned."

Buffett said it won't be long before Greg Abel replaces him as CEO and will be writing the annual letter.