Berkshire Hathaway, the legendary conglomerate long steered by Warren Buffett, reported a sharp drop in both quarterly and annual earnings for 2025, capping off a year marked by insurance headwinds, significant investment writedowns, and a historic leadership transition. The results, released on February 28, 2026, offer a revealing look at the company’s evolving fortunes as Greg Abel steps into the CEO role, with Buffett remaining as chairman.
For the fourth quarter of 2025, Berkshire Hathaway posted operating earnings of $10.2 billion, a steep decline of more than 29% from $14.56 billion in the same period a year earlier, according to the company’s official earnings release and confirmed by Reuters. The drop was largely attributed to a 54% plunge in insurance underwriting profits, which fell to $1.56 billion from $3.41 billion, and a nearly 25% dip in insurance investment income, down to $3.1 billion from $4.088 billion. These figures underscore the pressures facing Berkshire’s core insurance businesses, including Geico and its reinsurance operations, as they grappled with rising claims, increased advertising spending, and competitive pricing that limited customer growth.
Net income for the quarter also slipped, falling 3% to $19.2 billion from $19.7 billion a year prior. The decline was exacerbated by a $4.5 billion impairment charge related to Berkshire’s 26.9% stake in Occidental Petroleum—a move reflecting the company’s view that the oil giant’s declining stock price was not a temporary blip. Despite the writedown, Berkshire stated it has no intention to sell its Occidental shares, a holding Buffett began accumulating in 2019 to help finance Occidental’s purchase of Anadarko Petroleum. The quarter also included a separate $3.76 billion writedown of Berkshire’s investment in Kraft Heinz earlier in the year.
For the full year 2025, the numbers painted a similar picture of contraction. Operating earnings totaled $44.49 billion, down from $47.44 billion in 2024, while net income dropped a staggering 25% to $66.97 billion from $89 billion the previous year. Insurance underwriting profits for the year came in at $7.26 billion, a drop from $9 billion in 2024, and insurance investment income eased to $12.5 billion from $13.6 billion. The company’s manufacturing, retail, and service businesses managed modest gains—up 3% in the fourth quarter and 4% for the year—despite what Berkshire described as “sluggish” consumer demand affecting brands like Duracell, Fruit of the Loom, and Squishmallows maker Jazwares.
Notably, Berkshire’s vaunted cash reserves slipped to $373.3 billion at the end of 2025 from a record $381.6 billion in the third quarter, though this still leaves new CEO Greg Abel with considerable firepower for potential acquisitions. For the thirteenth straight quarter, Berkshire sold more stocks than it bought, and it refrained from share buybacks for the sixth consecutive quarter—a strategic stance that has drawn attention from analysts and investors alike.
Abel, who officially took the reins as CEO at the start of 2026, used his first annual letter to shareholders to emphasize continuity and respect for Buffett’s legacy. “We are committed to strengthening the great legacy built by Warren Buffett and his business partner Charlie Munger, ensuring it endures through our commitment to excellence,” Abel wrote, as reported by Reuters. He described Buffett as a “remarkable CEO” and “arguably the greatest investor of all time,” pledging to maintain the investment discipline that has defined Berkshire’s culture for decades. “I recognize how you want us to succeed together, and to do so in the right way,” Abel added.
Still, Abel acknowledged that some of Berkshire’s businesses need sharper operating performance. Industry analysts, such as Cathy Seifert of CFRA Research, noted that “top-line growth is a challenge,” and flagged Abel’s own warning that reinsurance and commercial insurance growth may be nonexistent in 2026. Revenue growth across Berkshire’s sprawling portfolio was described as “pretty tepid,” reflecting broader economic headwinds and sector-specific pressures.
One bright spot in the conglomerate’s diverse operations was the BNSF railroad, which saw profits rise 6% in the fourth quarter. In contrast, profits from Berkshire Hathaway Energy fell 5% over the same period. The company also cited lower gains related to foreign currency movements as a factor weighing on overall operating profit.
Berkshire’s investment strategy, a hallmark of Buffett’s tenure, remained conservative. The company’s official earnings statement reiterated its long-standing advice to investors: “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.” This caution reflects the accounting requirement to report unrealized gains and losses on equity securities, which can swing net income figures dramatically from quarter to quarter.
Despite the challenging year, Berkshire Hathaway Class A shares rose 10% in 2025, though this trailed the S&P 500’s 16.4% gain. Since Buffett announced his intention to step down as CEO on May 3, 2025, Berkshire’s shares have lagged the S&P 500 by more than 27 percentage points, and both have seen less than 1% growth so far in 2026. Yet, the long-term picture remains extraordinary: since 1965, Berkshire Hathaway has delivered compounded annual gains of 19.7%—nearly double the S&P 500’s compounded increases over the same period. Overall, Berkshire’s total gains for shareholders top 6,000,000%, compared to the S&P 500’s 46,061% including dividends, as Abel proudly highlighted in his letter to shareholders.
Looking ahead, Abel is widely expected to adopt a more hands-on approach to managing Berkshire’s portfolio companies, though the firm’s decentralized structure will persist. The conglomerate’s sprawling interests—spanning insurance, energy, railroads, manufacturing, retail, and services—will continue to operate with a high degree of autonomy, a strategy that has served Berkshire well through decades of market cycles.
As Berkshire Hathaway enters a new era under Abel’s leadership, investors and observers alike are watching closely to see how the company balances its storied past with the demands of a rapidly changing business landscape. The numbers from 2025 may have disappointed some, but the company’s enduring strengths—and its commitment to Buffett’s principles—remain firmly in place.