Berkshire Hathaway Reports Significant Decline in Q4 Operating Earnings Amidst Insurance Weakness and Transition to New Leadership

Omaha, Nebraska – May 3, 2025 – Berkshire Hathaway, the sprawling conglomerate helmed by legendary investor Warren Buffett, has reported a substantial decrease in its operating earnings for the fourth quarter of 2025, a trend largely attributed to a pronounced downturn in its core insurance operations. The company announced that its operating earnings for the final quarter of the year reached $10.2 billion, marking a significant decline of over 29% from the $14.56 billion reported in the corresponding period of the previous year.

This financial report signifies the conclusion of Warren Buffett’s tenure as CEO, a role he officially relinquished at the annual shareholders meeting held today. Greg Abel has now assumed the position of CEO, effective at the start of 2026. In his inaugural annual letter accompanying Saturday’s results, Abel pledged to uphold the foundational principles of financial strength and capital discipline that have been hallmarks of the Berkshire Hathaway culture under Buffett’s extensive leadership. Warren Buffett will continue to serve as Chairman of the Board.

The insurance segment, a critical pillar of Berkshire Hathaway’s financial performance, experienced a sharp contraction. Insurance underwriting profits plummeted by 54%, falling to $1.56 billion from $3.41 billion in the fourth quarter of 2024. Compounding this challenge, insurance investment income also saw a notable decrease, sliding nearly 25% to $3.1 billion from $4.088 billion a year earlier.

Looking at the full fiscal year 2025, Berkshire Hathaway’s operating earnings totaled $44.49 billion, a decrease from the $47.44 billion recorded in 2024. The insurance underwriting profits for the full year amounted to $7.26 billion, down from $9 billion in the prior year. Similarly, insurance investment income for the year eased to $12.5 billion, compared to $13.6 billion in 2024.

When considering overall earnings, which encompass both operating income and gains or losses from the conglomerate’s diverse portfolio of stock market investments, the picture for the fourth quarter shows a slight decline. Overall earnings in Q4 2025 stood at $19.2 billion, marginally lower than the $19.7 billion reported in the same quarter of the previous year. These figures were notably impacted by impairment charges totaling $4.5 billion, stemming from Berkshire’s investments in Kraft Heinz and Occidental Petroleum. Investment gains for the quarter reached $13.5 billion.

For the entire fiscal year 2025, overall earnings experienced a more significant drop, falling to $66.97 billion from $89 billion in the preceding year. Berkshire Hathaway consistently advises its investors to exercise caution when interpreting investment performance over short timeframes, emphasizing that such fluctuations can be misleading. The company’s earnings release reiterated this stance, stating, "The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules."

Share Buybacks Paused as Cash Reserves See Slight Dip

In a continuation of its strategy, Warren Buffett opted against repurchasing Berkshire Hathaway shares during the fourth quarter, despite the company’s ending the quarter with a stable financial position. Despite the absence of buybacks, Berkshire Hathaway’s substantial cash hoard experienced a modest reduction, decreasing to $373.3 billion from a record high of $381.6 billion reported in the third quarter of 2025.

Despite the headwinds faced in the current reporting period, Berkshire Hathaway’s Class A shares delivered a respectable performance over the course of 2025, appreciating by 10%. This growth, however, lagged behind the broader market, with the S&P 500 index advancing by 16.4% during the same period. Nonetheless, the legacy of Warren Buffett’s leadership has undeniably fostered exceptional wealth creation for the company’s shareholders over the decades.

Since 1965, Berkshire Hathaway has achieved compounded annual gains of an impressive 19.7%, a rate that has nearly doubled the compounded increases of the S&P 500 over the same extensive timeframe. Greg Abel, in his maiden annual letter as CEO, highlighted that the overall gains for Berkshire Hathaway since 1965 have exceeded an astonishing 6,000,000%, a stark contrast to the S&P 500’s gains of 46,061%, which include dividends. This historical performance underscores the enduring value and robust financial discipline that have characterized Berkshire Hathaway under Buffett’s guidance.