Berkshire Hathaway’s operating earnings surge 71% with record cash pile | CNN Business

CNN - Feb 22nd, 2025

Warren Buffett's Berkshire Hathaway reported a significant increase in its fourth-quarter operating earnings, which surged 71% year-over-year to a record $14.5 billion. For 2024, the company's operating profit rose by 27% to $47.4 billion, although full-year net income decreased by 7.5% from the previous year. The rise in profits was bolstered by improved Treasury Bill yields and increased holdings in short-term securities. The insurance sector, notably Geico, was a major contributor, with earnings from underwriting climbing 66% to $9 billion. Berkshire's cash reserves also hit a new high, reaching $334.2 billion in the fourth quarter, despite reductions in shares of Apple and Bank of America.

Warren Buffett acknowledged the nearing transition of leadership at Berkshire Hathaway, indicating that Greg Abel is set to succeed him as CEO. At 94 years old, Buffett suggested that Abel will soon take on the responsibility of writing the annual letters to investors, continuing the tradition of transparency and accountability. This transition signifies a significant shift for the conglomerate, known for its prudent investment strategies and robust financial health. The impending leadership change raises questions about the future direction of the company and its investment strategies under new management.

Apple Berkshire Hathaway Warren Buffett Bank Of America Greg Abel Geico Investment Income Insurance Underwriting Treasury Bills Corporate Succession

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RATING

7.8

Fair Story

Consider it well-founded

The article provides a comprehensive and accurate overview of Berkshire Hathaway's financial performance and leadership transition. It scores highly in accuracy due to its reliance on verified data from credible sources. The story is timely and of significant public interest, particularly for those in financial sectors. However, it could benefit from a broader range of perspectives and more transparency regarding its methodology. While the article is clear and well-structured, it may not engage a wider audience due to its specialized focus. Overall, the story is a reliable source of information for those interested in corporate finance and investment trends, with minor areas for improvement in balance and engagement.

Accuracy

The story is highly accurate, with most claims aligning well with verified data from Berkshire Hathaway's financial reports and Warren Buffett's annual letter. The claim about the 71% increase in operating earnings for the fourth quarter is precise and matches the figures reported. Additionally, the 27% rise in annual operating profit and the 66% increase in insurance underwriting earnings are corroborated by official reports. However, there is a minor discrepancy regarding the cash position figures, which are not fully detailed in the original story. Overall, the story demonstrates a strong commitment to factual accuracy, with only slight areas needing further clarification.

Balance

The story primarily focuses on Berkshire Hathaway's financial performance and future leadership, which is appropriate given the context. However, it lacks a broader range of perspectives, such as insights from financial analysts or industry experts. While Warren Buffett's views are well-represented, the article could benefit from additional viewpoints to provide a more comprehensive picture. The presentation is somewhat one-sided, emphasizing positive financial outcomes without discussing potential risks or challenges faced by the company.

Clarity

The article is well-structured and uses clear, concise language to convey complex financial information. The logical flow of the story makes it accessible to readers with varying levels of financial literacy. However, some technical terms related to financial performance could benefit from further explanation to enhance understanding. The tone is neutral and informative, maintaining objectivity throughout. Overall, the clarity of the article is strong, with only minor areas for improvement.

Source quality

The article relies heavily on information from Warren Buffett's annual letter and Berkshire Hathaway's official financial reports, which are credible and authoritative sources. These documents provide a reliable foundation for the claims made in the story. However, the article does not cite external sources or include expert analysis, which could enhance the depth of the reporting. The reliance on primary sources ensures accuracy but limits the diversity of perspectives.

Transparency

The article provides clear information about its sources, primarily referencing Warren Buffett's annual letter and Berkshire Hathaway's financial reports. However, it lacks explicit disclosure of the methodology used to interpret these sources. While the basis for claims is generally clear, the article could improve transparency by explaining how data was analyzed and by acknowledging any potential biases in the reporting. The absence of conflict of interest disclosures is a minor oversight, given the reliance on a single primary source.