On August 3, 2024, Berkshire Hathaway Inc (BRK.A, Financial) released its 8-K filing detailing the company's financial performance for the second quarter and first six months of 2024. Berkshire Hathaway, a diversified holding company with subsidiaries in insurance, utilities, railroads, and manufacturing, reported mixed results for the period.
Performance Overview
For the second quarter of 2024, Berkshire Hathaway Inc (BRK.A, Financial) reported net earnings attributable to shareholders of $30.35 billion, down from $35.91 billion in the same period last year. This translates to net earnings per Class A share of $21,122, compared to $24,775 in Q2 2023. The company's operating earnings, which exclude investment gains and losses, were $11.60 billion, up from $10.04 billion in the previous year.
Key Financial Metrics
Despite the increase in operating earnings, the overall net earnings were impacted by a significant decrease in investment gains. Investment gains for Q2 2024 were $18.75 billion, down from $25.87 billion in Q2 2023. This decline in investment gains is a crucial factor in the overall reduction in net earnings.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Earnings (in billions) | $30.35 | $35.91 |
| Operating Earnings (in billions) | $11.60 | $10.04 |
| Investment Gains (in billions) | $18.75 | $25.87 |
| Net Earnings per Class A Share | $21,122 | $24,775 |
Segment Performance
Berkshire Hathaway's core insurance business showed strong performance, with underwriting earnings of $2.26 billion, up from $1.25 billion in Q2 2023. Insurance investment income also increased to $3.32 billion from $2.37 billion in the previous year. However, other segments such as BNSF (railroad) and Berkshire Hathaway Energy saw slight declines in earnings.
Challenges and Achievements
The decline in net earnings can be attributed to the volatility in investment gains, which are influenced by market conditions and are not indicative of the company's operational performance. The company's operating earnings growth is a positive sign, reflecting the strength of its core businesses.
"The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules," the company stated in its filing.
Financial Health
As of June 30, 2024, Berkshire Hathaway had repurchased approximately $345 million worth of shares during the second quarter, bringing the six-month total to $2.9 billion. The company's insurance float stood at approximately $169 billion, indicating a robust financial position.
Conclusion
While Berkshire Hathaway Inc (BRK.A, Financial) reported a decline in net earnings, the company's strong operating earnings and solid performance in its core insurance business highlight its resilience. Investors are encouraged to review the full 10-Q filing for a comprehensive understanding of the company's financial health and future prospects.
Explore the complete 8-K earnings release (here) from Berkshire Hathaway Inc for further details.
