Berkshire Hathaway, led by CEO Warren Buffett, reported record operating earnings of $47.4 billion in 2024. Despite more than half of its 189 operating businesses experiencing a decline in earnings, the company’s overall performance exceeded expectations. The surge in earnings was largely driven by improved yields on Treasury Bills and an increased investment in these highly-liquid short-term securities.
At the close of 2024, Berkshire’s cash reserves and cash-equivalent holdings, including Treasury Bills, stood at $334.2 billion, nearly double the $167.6 billion recorded at the end of 2023. The value of the company’s equity portfolio was $272 billion, a significant decrease from the $354 billion valuation at the end of 2023. This decline was primarily due to major sales of Berkshire’s stake in Apple during the first three quarters of 2024, reducing the value of its holdings in the tech giant by approximately $100 billion. Buffett reassured shareholders that despite the large cash position, the majority of their investments remain in equities, predominantly American, with many having significant international operations. He emphasized that this investment strategy would remain unchanged.
Berkshire’s total revenues for 2024 amounted to $371.4 billion, up from $364.5 billion the previous year. However, its investment gains fell to $41.6 billion from $58.9 billion in 2023, reflecting the inherent volatility of these figures. In his annual letter to shareholders, Buffett addressed the mistakes made over the years, both in capital allocation and managerial assessments. He highlighted the importance of transparency and honesty in reporting to shareholders. Buffett also acknowledged the upcoming transition of leadership to Greg Abel, assuring that the company’s core values and investment philosophy would continue under Abel’s stewardship.
Buffett took pride in Berkshire’s significant tax contributions, noting the $26.8 billion paid to the IRS in 2024, the highest amount ever paid by a single company to the U.S. government. He lauded the long-term benefits of reinvesting profits, which have allowed Berkshire to grow and impact all corners of the country. The letter also mentioned changes to the annual shareholders’ meeting schedule, with the Q&A session starting and ending earlier. Buffett, along with Vice Chairmen Greg Abel and Ajit Jain, will address shareholders in a slightly adjusted format. Berkshire Hathaway’s strong financial performance, strategic adjustments, and commitment to its core values underscore its resilience and continued growth under Buffett’s leadership.