Berkshire Hathaway Inc. (NYSE:BRK-A) is a multinational conglomerate led by renowned investor Warren Buffett. The company operates in various sectors, including insurance, utilities, and railroads, and is known for its strategic investments and acquisitions. As Berkshire prepares to release its quarterly earnings on February 24, 2025, analysts anticipate an EPS of $6,683.12 and revenue of approximately $90.38 billion.
In 2024, Berkshire Hathaway demonstrated strong financial performance, achieving nearly $50 billion in operating earnings. The company reported a 71% year-over-year increase in fourth-quarter operating income, reaching $14.5 billion, driven by gains in the insurance sector. Despite favorable macroeconomic conditions, Buffett remained cautious about equities, selling $143.4 billion worth of stocks while acquiring only $9.2 billion.
Berkshire's strategic focus on liquidity is evident in its record-high cash reserves of $334.2 billion, a significant increase from $167.6 billion at the end of 2023. This surge is attributed to massive sales of holdings, including Bank of America, and a strategic shift towards U.S. Treasury Bills. Berkshire's Treasury Bill holdings exceed those of the Federal Reserve by $91.2 billion, highlighting Buffett's investment acumen.
The company's financial metrics reflect its market valuation and liquidity. With a P/E ratio of 9.66 and a price-to-sales ratio of 3.27, Berkshire's earnings and revenue are valued favorably by the market. Its enterprise value to sales ratio is 3.59, and the enterprise value to operating cash flow ratio is 28.11, providing insights into its valuation relative to sales and cash flow. The earnings yield of 10.35% offers a perspective on return on investment.
Berkshire Hathaway maintains a low debt-to-equity ratio of 0.22, indicating a conservative approach to leverage. Its strong current ratio of 13.48 underscores robust liquidity, allowing the company to meet its short-term obligations comfortably. Buffett's preference for reinvesting profits over distributing dividends aligns with his long-term investment philosophy, emphasizing disciplined capital allocation.
