Berkshire Hathaway Profits Dip

The fourth-quarter operating earnings saw a significant drop of over 29% to $10.2 billion, down from $14.56 billion in the same period of the prior year. For the full year 2025, operating profits declined to $44.49 billion from $47.44 billion in 2024. The slump in the core insurance business was stark, with underwriting profits plunging 54% to $1.56 billion in the fourth quarter. Insurance investment income also took a hit, falling nearly 25% to $3.1 billion. For the full year, insurance underwriting profits fell to $7.26 billion from $9 billion in 2024. The writedown on Occidental Petroleum was part of a combined $4.5 billion impairment charge in the fourth quarter that also included an investment in Kraft Heinz. This comes after a separate $3.76 billion writedown on Kraft Heinz earlier in 2025. While insurance operations faced headwinds, other major Berkshire divisions posted gains. The BNSF railroad business saw its operating earnings rise about 5% to $1.3 billion in the fourth quarter. For the full year, BNSF's earnings grew by approximately 9% to $5.5 billion, while the energy unit's earnings increased by 7% to $4.0 billion. This earnings report marks a significant transition, being the last under Warren Buffett's tenure as CEO. Greg Abel, his successor, officially took the helm in January 2026 and released his first annual letter, vowing to maintain the company's established culture and financial discipline. Despite the profit decline, the conglomerate's cash reserves remained substantial, ending the year at $373.3 billion. However, the company did not buy back any of its own shares during the fourth quarter. In his first letter to shareholders, new CEO Greg Abel acknowledged the challenges in the insurance sector, stating that a recent reversal in pricing trends will likely lead Berkshire to write less property and casualty business for a period of time. Abel also emphasized his commitment to maintaining Berkshire's "fortress-like" balance sheet.