Berkshire Hathaway Earnings Jump 34% in Q2 2024
Warren Buffett’s Berkshire Hathaway reported a 34% rise in operating earnings, reaching $10.04 billion in Q2 2024—up from $7.5 billion a year earlier. The conglomerate’s insurance, railroad, and energy divisions led the growth, while its cash reserves ballooned to a historic $381 billion, sparking speculation about Buffett’s next move.
Key Drivers: Insurance, Railroads, and Energy Shine
- Insurance: Underwriting profits more than doubled, driven by Geico and reinsurance gains.
- BNSF Railway: Higher freight volumes and efficiency boosts lifted earnings.
- Energy Unit: Renewable investments and steady utility revenues contributed to growth.
Berkshire’s diversified portfolio—from Dairy Queen to Duracell—proved resilient despite inflation and interest rate fluctuations, reinforcing Buffett’s strategy of investing in cash-flow-strong businesses.
No Buybacks, Record Cash: Buffett’s Waiting Game
For the first time in years, Berkshire repurchased zero shares in Q2, despite a history of aggressive buybacks. With Class A shares near all-time highs (~$600,000), Buffett instead added $20 billion to cash reserves. The $381 billion stockpile has investors questioning:
– Is Buffett eyeing a major acquisition?
– Is he waiting for a market downturn to deploy capital?
What’s Next for Berkshire’s $381B War Chest?
Buffett has a history of seizing crises—like the 2008 deals with Goldman Sachs and Bank of America—but high valuations today make “elephant-sized” deals rare. His recent shareholder letters emphasize patience, suggesting he’s holding fire for better opportunities.
Investor Reactions: Praise and Frustration
- Bullish Take: Fans applaud Buffett’s discipline, trusting his long-term vision.
- Bearish Take: Critics argue idle cash drags returns, with Treasury bills yielding minimal profits.
The Bottom Line: Buffett’s Patience Pays Off
With $381 billion ready to deploy, Berkshire is poised to act when markets correct or a mega-deal emerges. Until then, shareholders must rely on steady earnings growth and Buffett’s track record of timely, high-impact investments.
(Article by NextMinuteNews, August 2024)
