Berkshire Hathaway Profits Fall Due to Weaker Insurance Performance

Berkshire Hathaway Faces Leadership Transition and Profit Decline

Greg Abel has officially taken over as CEO from Warren Buffett, marking a significant leadership change for Berkshire Hathaway.

Berkshire Hathaway experienced a 2.5% decrease in its quarterly earnings, primarily due to reduced income from its insurance segment. The company's net profit dropped to $19.2 billion, translating to $13,349 per Class A share, compared to $19.69 billion, or $13,695 per share, during the same period last year.

Highlights from The Wall Street Journal

By the end of 2025, Berkshire Hathaway’s cash and Treasury bill holdings reached a record $373.1 billion, reflecting a 4% rise from the previous quarter after factoring in payments for short-term government securities. The company did not repurchase any of its own shares for the sixth consecutive quarter.

At 95, Warren Buffett announced in May that he would step down as CEO, passing the reins to Greg Abel, a trusted executive. Abel’s appointment at the start of January ushered in a new chapter for the conglomerate. On Saturday, Abel addressed shareholders for the first time in his new role, acknowledging the challenge of following in Buffett’s footsteps, stating, “Warren is obviously a very hard act to follow.”

Berkshire’s operating earnings, which exclude certain investment results, declined by 30% to $10.2 billion from $14.53 billion. While profits from insurance and investment activities decreased, the company saw improved results from its BNSF railroad and its manufacturing, service, and retail divisions.

Buffett has often emphasized that operating earnings provide a clearer picture of Berkshire’s performance. Due to accounting standards, the company must report unrealized gains and losses from its vast investment portfolio, which can cause significant fluctuations in reported net income based on market volatility.

The price of Berkshire’s Class A shares hit an all-time high of $809,350 on May 2, just before Buffett revealed his retirement as CEO. Since then, the stock has fallen by 6.5%, closing at $757,000 on Friday, while the S&P 500 index has climbed 21% over the same period.

Throughout the year, Berkshire was a net seller of equities.