(BRK.A), (BRK.B)
Berkshire Hathaway reported a sharp improvement in its third-quarter 2024 results, showing a net profit of $26.3 billion, a significant rebound from a $12.8 billion loss in the same period last year. This surge was largely due to strong investment gains of $16.2 billion, compared to a substantial investment loss of $23.5 billion in Q3 2023.
Warren Buffett has long cautioned that changes in portfolio value do not give a true picture of the company’s health, and points to Berkshire’s operating earnings as a better barometer.
The conglomerate’s operating earnings were slightly down, totaling $10.1 billion, compared to $10.8 billion in the previous year’s third quarter.
Key contributors to operating earnings included insurance underwriting and investment income, as well as steady returns from its BNSF railway and energy businesses.
Earnings per Class A share rose to $18,272, compared to a loss of $8,824 per share last year. Meanwhile, Class B shares mirrored this trend, with earnings reaching $12.18 per share.
For the first nine months of 2024, Berkshire achieved $69.3 billion in net earnings, up from $58.6 billion in 2023, reflecting improved returns from both investments and core operations.
Cash on hand swelled to a record $325.2 billion, primarily the result of Berkshire’s continued sale of some of its Apple shares and Bank of America shares.
Year to date, Berkshire also repurchased $2.9 billion in shares, however, as the price of the stock has soared to record territory, Warren Buffett has stopped his buybacks, and there were none in the third quarter.
The firm cautioned that quarterly investment gains are volatile and may not fully reflect its long-term performance.
©2024 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.