Warren Buffett and Greg Abel inspect Berkshire Hathaway’s annual shareholder meeting held in Omaha, Nebraska on May 3, 2025.
David A. Grogen | CNBC
Berkshire Hathaway reported a significant decline in operating profit in the fourth quarter, primarily due to a downturn in the conglomerate’s insurance business.
Fourth quarter operating income totaled $10.2 billion. This was down more than 29% from $14.56 billion in the same period last year.
This was the last quarter under CEO Warren Buffett, who announced his resignation at the company’s annual shareholder meeting last May. Greg Abel takes the reins to start 2026, pledging in Berkshire’s annual letter accompanying Saturday’s results to continue the culture that Buffett built on financial strength and capital discipline. Buffett will remain chairman.
Underwriting profit was $1.56 billion, down 54% from $3.41 billion in the same period last year. Insurance investment income fell nearly 25% from $4.088 billion to $3.1 billion.
Operating income for the full year 2025 totaled $44.49 billion. This was down from $47.44 billion the previous year.
Profits from insurance underwriting were $7.26 billion, down from $9.0 billion in 2024. Insurance investment income for the year fell to $12.5 billion from $13.6 billion the year before.
Overall profit, which includes gains and losses from the conglomerate’s stock market investments, was $19.2 billion in the fourth quarter, down slightly from $19.7 billion a year earlier. However, these numbers were affected by a $4.5 billion impairment charge from Berkshire’s investments in Kraft Heinz and Occidental Petroleum. Investment income was $13.5 billion.
Meanwhile, full-year profit fell to $66.97 billion from $89 billion a year earlier. Indeed, Berkshire always tells investors not to pay too much attention to short-term investment performance.
“The amount of investment gain (loss) in a particular quarter is typically meaningless and provides a net income per share figure, which can be highly misleading to investors with little or no knowledge of accounting rules,” the company said in its earnings release.
No share buybacks, cash holdings slightly decreased
Despite the fourth quarter ending flat, Buffett once again refrained from buying back Berkshire stock. Despite no share buybacks, the conglomerate’s cash holdings fell to $373.3 billion from a record $381.6 billion in the third quarter.
Berkshire Hathaway’s Class A shares rose 10% in 2025, lagging the S&P 500’s 16.4x gain. Still, Buffett’s leadership has resulted in unparalleled wealth creation for shareholders.
Since 1965, Berkshire Hathaway has earned a compound annual return of 19.7%. This is nearly twice the compounded increase in the S&P 500 at the time. Berkshire’s overall return over that period was more than 6 million percent, but the S&P 500 was up only 46,061 percent, including dividends, Abel noted in his first annual letter to shareholders as CEO.
