Berkshire Hathaway reported a decline in operating profit for the fourth quarter, primarily due to reduced income from its insurance operations. The company also wrote down a long-standing investment in Occidental Petroleum. This quarter marks Warren Buffett’s final one as chief executive of the conglomerate, with Greg Abel now assuming the role, while Buffett remains as chairman. Berkshire Hathaway is a multinational conglomerate holding company that owns a diverse range of businesses, including insurance, energy, manufacturing, and retail. The company is known for its value investing approach and long-term investment horizon.
The company’s operating profit fell 30% to $10.2 billion, or approximately $7,092 per Class A share, down from $14.53 billion the previous year. A significant factor was a 38% decrease in quarterly insurance profit, influenced by falling interest rates impacting income on Berkshire’s cash reserves. Simultaneously, pricing pressures limited the growth of Geico and the reinsurance businesses. Net income experienced a 3% dip, settling at $19.2 billion compared to $19.69 billion, as the writedown and reduced operating profit offset gains from holdings in Apple, American Express, and other stocks.
For the entire year, operating profit decreased by 6% to $44.49 billion, while net income fell by 25% to $66.97 billion. Berkshire ended 2025 with $373.3 billion in cash. In his inaugural annual letter to Berkshire shareholders, Abel lauded Buffett as a “remarkable CEO” and “arguably the greatest investor of all time,” vowing to uphold his investment discipline. He also acknowledged the need for improved operating performance in some of Berkshire’s businesses.
Berkshire’s $4.5 billion writedown of its stake in Occidental reflected concerns that the oil company’s declining stock price was not temporary. The company also experienced a $3.76 billion writedown of its investment in Kraft Heinz earlier in 2025. Since Buffett’s announcement of his stepping down on May 3, Berkshire shares have underperformed the Standard & Poor’s 500 by over 27 percentage points, with both rising less than 1% in 2026.
