Why did Berkshire's net earnings swing so dramatically from a loss in Q3 2023 to a large profit in Q3 2024?

The swing was driven mainly by investment gains and losses rather than business operations. Investment gains were $16.16 billion in Q3 2024 versus losses of $23.53 billion in Q3 2023, largely because GAAP requires changes in unrealized gains and losses on equity holdings to flow through earnings. Management notes that these figures are usually not indicative of quarterly business performance.

Is Berkshire's core business performing better or worse than last year?

It is mixed. Third-quarter operating earnings declined about 6% to $10.09 billion, mainly because insurance underwriting profit fell to $750 million and the Other category swung to a loss. However, year-to-date operating earnings rose about 14% to $32.91 billion, supported by higher insurance investment income, stronger Berkshire Hathaway Energy results, and lower foreign currency losses over the nine months.

What caused the drop in insurance underwriting earnings?

The filing does not provide a detailed explanation for the decline from $2.42 billion to $750 million in Q3 2024. Investors seeking the cause should review the Form 10-Q referenced in the release, which contains fuller segment discussion.

How is Berkshire using its capital and what is the size of its insurance float?

Berkshire repurchased approximately $2.9 billion of its shares during the first nine months of 2024. Insurance float, the net liabilities assumed under insurance contracts, stood at about $174 billion at September 30, 2024, an increase of $5 billion since year-end 2023. Float represents low-cost capital that Berkshire can invest, so its growth is generally viewed as a positive indicator of the insurance business's funding base.

Should investors rely solely on this press release to make decisions?

No. The company explicitly states that the limited information in the press release is not adequate for making an informed investment judgment and urges readers to review the Form 10-Q, which provides complete financial statements and disclosures.

BRK-B/BRK-A 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed November 4, 2024. Cited figures are marked; the original filing is the authoritative source.

Berkshire Hathaway's Q3 2024 earnings release, furnished under Item 2.02 on November 2, 2024, shows net earnings attributable to Berkshire shareholders of $26.25 billion^a for the third quarter, versus a loss of $12.77 billion in Q3 2023.

The swing is driven almost entirely by investment gains, which were $16.16 billion^b in Q3 2024 compared with losses of $23.53 billion a year earlier. Operating earnings, which exclude investment gains and losses, were $10.09 billion, down about 6% from $10.76 billion in Q3 2023. For the first nine months of 2024, net earnings were $69.30 billion versus $58.65 billion, and operating earnings were $32.91 billion versus $28.87 billion, an increase of roughly 14%.

The quarterly operating earnings decline was concentrated in insurance underwriting, which fell to $750 million^c from $2.42 billion, and in the "Other" category, which swung to a $877 million loss, largely from roughly $1.1 billion of foreign currency losses on non-U.S. dollar debt. These pressures were partly offset by insurance investment income, which rose to $3.66 billion from $2.47 billion, and by Berkshire Hathaway Energy, which rose to $1.63 billion from $498 million. Insurance float reached about $174 billion, up $5 billion since year-end 2023, and Berkshire repurchased roughly $2.9 billion of its shares in the first nine months.

Investors should note that management explicitly cautions that quarterly investment gains and losses are usually meaningless for assessing business performance and that the press release alone is insufficient for an investment decision. The filing directs readers to the Form 10-Q for complete information. Per-share figures are stated as 1/1,500th of the Class A amounts for Class B shares.

02—Key points

Key Highlights

Q3 2024 net earnings attributable to Berkshire shareholders were $26.25 billion, compared with a $12.77 billion loss in Q3 2023, driven primarily by investment gains of $16.16 billion.
Q3 2024 operating earnings were $10.09 billion, down about 6% from $10.76 billion in Q3 2023.
First nine months 2024 operating earnings rose to $32.91 billion from $28.87 billion, up about 14% year over year.
Insurance underwriting earnings fell sharply to $750 million in Q3 2024 from $2.42 billion, while insurance investment income rose to $3.66 billion from $2.47 billion.
Berkshire Hathaway Energy operating earnings increased to $1.63 billion in Q3 2024 from $498 million, and BNSF rose to $1.38 billion from $1.22 billion.
The "Other" category swung to an $877 million loss in Q3 2024, including about $1.1 billion of foreign currency losses on non-U.S. dollar debt.
Insurance float was about $174 billion at September 30, 2024, up $5 billion from year-end 2023, and Berkshire repurchased about $2.9 billion of shares in the first nine months of 2024.

03—Questions

Frequently Asked Questions

Why did Berkshire's net earnings swing so dramatically from a loss in Q3 2023 to a large profit in Q3 2024?
The swing was driven mainly by investment gains and losses rather than business operations. Investment gains were $16.16 billion in Q3 2024 versus losses of $23.53 billion in Q3 2023, largely because GAAP requires changes in unrealized gains and losses on equity holdings to flow through earnings. Management notes that these figures are usually not indicative of quarterly business performance.
Is Berkshire's core business performing better or worse than last year?
It is mixed. Third-quarter operating earnings declined about 6% to $10.09 billion, mainly because insurance underwriting profit fell to $750 million and the Other category swung to a loss. However, year-to-date operating earnings rose about 14% to $32.91 billion, supported by higher insurance investment income, stronger Berkshire Hathaway Energy results, and lower foreign currency losses over the nine months.
What caused the drop in insurance underwriting earnings?
The filing does not provide a detailed explanation for the decline from $2.42 billion to $750 million in Q3 2024. Investors seeking the cause should review the Form 10-Q referenced in the release, which contains fuller segment discussion.
How is Berkshire using its capital and what is the size of its insurance float?
Berkshire repurchased approximately $2.9 billion of its shares during the first nine months of 2024. Insurance float, the net liabilities assumed under insurance contracts, stood at about $174 billion at September 30, 2024, an increase of $5 billion since year-end 2023. Float represents low-cost capital that Berkshire can invest, so its growth is generally viewed as a positive indicator of the insurance business's funding base.
Should investors rely solely on this press release to make decisions?
No. The company explicitly states that the limited information in the press release is not adequate for making an informed investment judgment and urges readers to review the Form 10-Q, which provides complete financial statements and disclosures.

04—Continue

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