Berkshire's posting increased profits, boosted by US Treasury holdings

Warren E. Buffett, a well-known investor known for his undervalued stocks and enthusiasm for his businesses, has been bullish these days about traditionally stable investments.

Cash reserves held by his vast multinational conglomerate Berkshire Hathaway rose to over $334 billion at the end of last year. The conglomerate has more than doubled its Treasury holdings for a year ago, thanks to cash generated by selling most of its Apple stock.

In his annual report and letters to shareholders, who was released on Saturday, Buffett defended Berkshire Reservoirs. He said he is happy to ensure that there are no potentially favorable investment opportunities or that there are no potentially potential investment opportunities.

“Berkshire never prefers ownership of cash equivalent assets over ownership of a good business,” Buffett wrote.

But the stable interest rates offered by the Treasury bill stabilized Buffett's empire, making it a year when more than half of the nearly 200 companies it operates fell in revenue. Berkshire Hathaway won a net profit of $90 billion last year.

Company's operating profit – Buffett excludes paper losses and profits from investments that are not sold, so the metric was $47 billion in 2024, down from $37 billion in 2023. .

Insurance, Berkshire's core business line, showed significant returns on investments and underwriting income. The lack of a 2024 “monster” event was a huge boon, Buffett writes, but he says that the industry needs to “take our chunks without heart” when that luck changes. I admitted.

“One day, anytime, you'll have a truly incredible insurance loss,” he wrote. “Think Wildfires,” he later added in a note in parentheses, referring to the fire that devastated Los Angeles.

Geico, Berkshire's auto insurance business, has moved from a loss of nearly $2 billion in its 2022 underwriting business to nearly $8 billion in 2024.

The company is “a long-standing gem that requires a massive recurrence,” and wrote, citing the work Todd Combs did to rethink his business. Combs is Berkshire investment manager who became GEICO's CEO in 2020.

Last year, Berkshire confirmed its hold at the Pilot Travel Centre, a gas and truck stop chain that the conglomerate began investing in in 2017. I currently own the company entirely.

However, pilot revenues plummeted last year, falling to $614 million as part of a massive decline in Berkshire's retail and services business. Netjet. According to Berkshire, the decline in average fuel prices has hit pilots, increasing the preference for consumers to eat at home, dragging them by the results of the dairy queen.

Berkshire sold almost 70% of Apple shares last year and gave up more than 600 million shares, but Apple is Berkshire's largest shareholding. The profits from these sales contributed to the milestones that Buffett pointed out in his letter: the $26.8 billion tax bill he called the US record, and said, “about five of the US's all paid in America.” It was said to be equal to %.

Buffett, 94, has been running Berkshire from his hometown of Omaha for decades, and includes holdings of the textile manufacturer of the same name, including investments in railways, jewellery retailers, candy makers and blue chip companies. It has been transformed into a vast multinational conglomerate. Like American Express and Coca-Cola. Last year, the company's market valuation exceeded $1 trillion.

He called Berkshire Railways and Public Works, two of the biggest business areas other than insurance, as stable in 2024 but “has many challenges to achieve.” BNSF Railroad's operating profit was $5 billion, a slight decline from a year ago, while Berkshire Hathaway Energy acquired $3.7 billion, an increase of 60% from the previous year. Compared to 2023, as well as the reduction in estimated wildfire losses in 2024, increased revenue from natural gas pipelines supported the utility business line.

One place where Buffett sees opportunities is in Japan. Six years ago, Berkshire began accumulating stocks in five diverse Japanese companies, and was quickly rewarded. The company paid nearly $14 billion for shares that ended the year at a market value of over $23 billion. Buffett said he expects Berkshire to hold Japan's holdings for decades.

Buffett said he plans to re-enter the stage for Berkshire's annual shareholders meeting in May this year. Nodding to his advance age, he said, “It's long before Greg Abel, the leader of Berkshire Hathaway Energy and his designated successor, replaced him as Berkshire's chief executive. Not there,” he wrote.

But Buffett included a lengthy anecdote about Pete Reagle, the founder of Forest River, a Berkshire company that he bought in 2005, and was included in the newsletter. Forest River has become the country's largest manufacturer of outdoor recreation, and vehicles such as cargo trailers, pontoon boats, buses, vans, and other vehicles contributed “billions of billions.” Berkshire shareholder.

“Pete passed away in November and was still working at 80,” Buffett approved.