Berkshire Hathaway announced a substantial decrease in its operating earnings during the fourth quarter, which was mainly caused by the poor performance of the insurance business of the conglomerate.
Operating earnings amounted to $10.2 billion in Q4. This is a decline of over 29 percent from the previous year’s performance of $14.56 billion.
It was the last quarter that Warren Buffett served as CEO, who announced his retirement at the annual shareholders meeting last May.
Greg Abel assumed the helm to kick off 2026, and in Berkshire’s annual letter alongside the results on Saturday, he made a promise to keep the culture Buffett had created of financial prowess and capital discipline.
The insurance underwriting profits have decreased by 54 percent to $1.56 billion against $3.41 billion the previous year. Income from insurance investment decreased by almost 25 percent between to $3.1 billion and $4.088 billion.
During the entire year 2025, there were operating earnings amounting to $44.49 billion. It is compared to $44 billion in the previous year.
Insurance underwriting profits were registered at $7.26 billion, compared to $9 billion in 2024. Insurance investment income for the year eased to $12.5 billion from $13.6 billion a year prior.
Total income, including any losses or gains on its investments in the stock market, declined slightly in the fourth quarter to $19.2 billion compared with $19.7 billion a year earlier.
Nevertheless, these figures were affected by a $4.5 billion impairment of the investments that Berkshire had in Kraft Heinz and Occidental Petroleum. The returns on investment amounted to $13.5 billion.
Total annual earnings, including full year, decreased to $66.97 billion in the previous year $89 billion. Indeed, Berkshire always tells investors to pay little attention to its investments’ performance over short time frames.
The company said in its earnings release, “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.”
Buffett once again did not buy back Berkshire shares even though it ended Q4 on the flat line. Although the lack of buybacks, the conglomerate’s cash hoard did slip to $373.3 billion from a record of $381.6 billion in the third quarter.
Berkshire Hathaway Class A shares increased 10 percent in 2025, lagging the S&P 500′s 16.4 percent advance. Buffett has managed to create unprecedented wealth among shareholders.
Since 1965, Berkshire Hathaway has experienced compounded annual returns of 19.7 percent. That’s nearly double the S&P 500′s compounded increases in that time.
The overall returns of Berkshire are more than 6,000,000 percent over such a time span, and the S&P 500 has been up only 46,061 percent with dividends, Abel wrote in his first annual letter to shareholders as CEO.
