Berkshire Hathaway has reported record-breaking annual profits, with its cash reserves soaring to $334.2 billion. The conglomerate, led by Warren Buffett, saw a 27% rise in operating profit to $47.44 billion, marking its third consecutive record year.
Quarterly operating profits also surged by 71% to $14.53 billion.
Net income for the year reached $89 billion, driven by investments in major companies such as Apple and American Express. Berkshire’s growing cash reserves reflect high business valuations and a strategy of selling more stocks than it buys, including a reduction in its Apple holdings.
Buffett’s Warning to Washington
In his annual shareholder letter, Buffett, now 94, urged U.S. lawmakers to act responsibly with fiscal policies. He expressed concerns over rising deficits and cautioned against the “fiscal folly” that could undermine the stability of the U.S. dollar.
“Take care of the many who, for no fault of their own, get the short straws in life. They deserve better,” Buffett wrote, emphasizing the government’s role in maintaining economic stability.
Buffett also reassured shareholders about Berkshire’s future leadership, praising Vice Chairman Greg Abel’s ability to manage the company’s vast capital. “It won’t be long” before Abel takes over, he noted.
Investment Strategy and Future Outlook
Despite record earnings, Buffett acknowledged fewer attractive buying opportunities in the market, stating, “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.”
Berkshire continues to favor equities over cash and has not paid a dividend since 1967. While avoiding major acquisitions in recent years, the firm is expected to expand its $23.5 billion investments in five major Japanese trading houses.
Berkshire’s stock has risen 15% over the past year, though it lags behind the S&P 500’s 18% gain. Analysts note that the firm’s massive size limits its ability to generate outsized returns as it did in earlier decades.
As Buffett prepares to spend less time at Berkshire’s annual meeting, investors are closely watching how the company will navigate a shifting economic and political landscape.