How did BRK.B's Q4 earnings surprise investors?

Berkshire Hathaway's (BRK.B) Q4 2024 earnings report showcased a significant divergence in performance metrics, leading to mixed reactions from investors: 1. **Operating Earnings Surge**: The company's operating profit for Q4 2024 reached $14.53 billion, surpassing market expectations of $9.87 billion and marking a 71% year-over-year increase. This significant growth was driven by strong performance in insurance investment profits, which surged by 48% to $4.1 billion. The full-year operating profit increased by 27% to $47.437 billion. |code|Ticker|Name|Date|Percentage Change|market_code| |---|---|---|---|---|---| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240102|1.6262|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240103|1.1836|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240104|-0.8371|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240105|0.5252|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240108|0.7084|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240109|-0.3477|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240110|0.278|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240111|-1.2448|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240112|0.0771|169| |BRK.B|BRK.B.N|Berkshire Hathaway B|20240116|-0.693|169| 2. **Net Earnings Decline**: However, net earnings attributable to shareholders decreased to $19.694 billion in Q4 2024, down from $37.574 billion in the same period of 2023. This decline was primarily due to substantial investment losses, with investment gains falling to $5.167 billion from $29.093 billion in the previous year. 3. **Investor Sentiment**: The mixed results led to varied investor sentiment. While the strong operating earnings growth was viewed positively, the decline in net earnings and significant investment losses raised concerns among investors. The company's strategic shifts, including selling stock securities and repurchasing shares, also influenced investor perceptions. 4. **Market Reaction**: Following the earnings release, Berkshire Hathaway's stock (BRK.B) showed a positive performance, with a percentage change of 4.11% on February 24, 2025. This indicated investor confidence in the company's operational performance despite the decline in net earnings. In conclusion, Berkshire Hathaway's Q4 2024 earnings report highlighted strong operating earnings growth, primarily driven by insurance investment profits, which surprised investors positively. However, the decline in net earnings due to investment losses created some uncertainty. The company's strategic actions and record cash holdings of $334.2 billion also influenced investor sentiment, leading to a mixed reaction to the earnings report.