Berkshire Hathaway Profits Tumble
Warren Buffett’s Berkshire Hathaway reported a significant drop in quarterly profit, a downturn attributed to weakness in its insurance operations and a writedown on its Occidental Petroleum investment. The results are seen as a bellwether for the broader economy, reflecting pressures from persistent inflation and geopolitical uncertainty on insurance profitability.
The conglomerate's operating profit fell 30% to $10.2 billion for the quarter, a significant drop from $14.53 billion a year earlier. A major contributor was a $4.5 billion writedown on Berkshire's investment in Occidental Petroleum, reflecting a belief that the oil company's recent stock price decline is not temporary. The core insurance business saw its quarterly profit plummet by 38%. Its GEICO auto insurance unit, in particular, experienced a nearly 50% drop in pretax underwriting profit due to increased spending on advertising and a rise in accident claims. These results mark the final quarter under Warren Buffett's tenure as CEO. His successor, Greg Abel, officially took over in January 2026 and released his first annual letter to shareholders, pledging to uphold the company's established values. Abel inherits a massive cash hoard of $373.3 billion, providing significant "dry powder" for potential major acquisitions that eluded Buffett in recent years. In his first letter, Abel affirmed he has no plans to begin paying a dividend, a stance long held by Buffett. The quarter was also the 13th in a row in which Berkshire was a net seller of stocks. The company has also gone six consecutive quarters without repurchasing any of its own shares. Performance was mixed across Berkshire's other varied holdings. The BNSF railroad saw a 6% rise in quarterly profit, while profits from the company's energy operations fell 5%. Businesses like Duracell and Fruit of the Loom saw modest profit growth despite what the company termed "sluggish" consumer demand.
