Berkshire Hathaway showed a significant drop in its operating profits for the final quarter, primarily attributed to challenges within the conglomerate’s insurance sector.
Operational earnings reached $10.2 billion in Q4. This marks a decrease of over 29% from $14.56 billion during the same period last year.
This quarter was the last under Warren Buffett’s leadership as CEO, who revealed his resignation at last May’s annual shareholders meeting. Greg Abel commenced his role at the beginning of 2026 and pledged in Berkshire’s annual letter accompanying Saturday’s results to preserve the culture of financial soundness and disciplined capital management established by Buffett. Buffett continues as chairman.
Profits from insurance underwriting plummeted 54% to $1.56 billion down from $3.41 billion a year ago. Insurance investment income decreased nearly 25%, dropping to $3.1 billion from $4.088 billion.
For the entire year of 2025, operating profits amounted to $44.49 billion, a decline from $47.44 billion the previous year.
Insurance underwriting profits totaled $7.26 billion, down from $9 billion in 2024. Insurance investment income for the year fell to $12.5 billion from $13.6 billion a year earlier.
Comprehensive earnings, which encompass gains or losses from the conglomerate’s stock market activities, slightly decreased in the fourth quarter to $19.2 billion from $19.7 billion the previous year. However, these figures were affected by a $4.5 billion write-down related to Berkshire’s investments in Kraft Heinz and Occidental Petroleum. Investment gains were reported at $13.5 billion.
For the full year, overall earnings declined to $66.97 billion from $89 billion the previous year. It’s important to note that Berkshire consistently advises investors to be less concerned with the performance of its investments over brief intervals.
“The level of investment gains (losses) in any specific quarter is generally inconsequential and can lead to figures for net earnings per share that may be very misleading for investors who lack extensive understanding of accounting practices,” the firm remarked in its earnings announcement.
No stock buybacks, slight dip in cash reserves
Berkshire refrained from repurchasing shares again this quarter, even though it closed Q4 at a stable level. Despite no stock buybacks, the conglomerate’s cash reserves fell to $373.3 billion from a peak of $381.6 billion in the third quarter.
Berkshire Hathaway Class A shares appreciated by 10% in 2025, trailing behind the S&P 500’s 16.4% increase. Nevertheless, Buffett’s stewardship has resulted in exceptional wealth generation for investors.
Since 1965, Berkshire Hathaway has experienced compounded annual growth of 19.7%. This nearly doubles the S&P 500’s compounded growth over that timeframe. Overall returns for Berkshire surpass 6,000,000% during this period, while the S&P 500’s gains stand at just 46,061%, including dividends, as noted by Abel in his inaugural annual letter to shareholders as CEO.
