Warren Buffett and Greg Abel attend Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska on May 3, 2025.
David A. Grogen | CNBC
Berkshire Hathaway reported a sharp decline in operating profit for the fourth quarter, driven largely by weakness in the conglomerate’s insurance business.
Operating profit totaled $10.2 billion in the fourth quarter. That’s down more than 29% from $14.56 billion the year before.
This was the final quarter under CEO Warren Buffett, who announced his resignation at the annual shareholder meeting last May. Greg Abel took the reins to start 2026 and swore in Berkshire annual letter accompanying Saturday’s results to perpetuate the culture that Buffett has built on financial strength and capital discipline. Buffett remains president.
Insurance underwriting profits fell 54 percent to $1.56 billion from $3.41 billion a year earlier. Insurance investment income fell nearly 25%, from $4.088 billion to $3.1 billion.
For the full year 2025, operating profit was $44.49 billion. That’s down from $47.44 billion the year before.
Insurance underwriting profits were $7.26 billion, down from $9 billion in 2024. Insurance investment revenue for the year decreased to $12.5 billion from $13.6 billion a year earlier.
Overall profit, which includes gains or losses on the conglomerate’s stock investments, fell slightly in the fourth quarter to $19.2 billion from $19.7 billion a year earlier. However, these figures were impacted by a $4.5 billion writedown of Berkshire’s investments in Kraft Heinz and Occidental Petroleum. Investment gains totaled $13.5 billion.
At the same time, overall profit for the full year fell to $66.97 billion from $89 billion a year earlier. To be sure, Berkshire still tells investors to pay little attention to how its investments perform over short periods of time.
“The amount of investment gains (losses) in a given quarter is generally meaningless and provides net income per share figures that can be extremely misleading to investors who have little or no knowledge of accounting rules,” the company said in its earnings release.
No buybacks, cash flow decreases slightlyBuffett once again refrained from buying back shares of Berkshire, even though the fourth quarter ended flat. Despite the lack of buybacks, the conglomerate’s cash flow fell to $373.3 billion from a record $381.6 billion in the third quarter.
Berkshire Hathaway’s Class A shares are up 10% in 2025, lagging the S&P 500’s 16.4 gain. Yet Buffett’s leadership has led to unprecedented wealth creation for shareholders.
Since 1965, Berkshire Hathaway has recorded compound annual gains of 19.7%. This represents almost double the compound increases of the S&P 500 during this period. Berkshire’s overall gains exceed 6,000,000% over that period, while the S&P 500 has gained just 46,061%, including dividends, Abel noted in his first annual letter to shareholders as CEO.
