Berkshire Hathaway Profits Decline
Warren Buffett's Berkshire Hathaway reported a drop in quarterly profit, dragged down by weakness in its insurance operations. The conglomerate also took a hit from writedowns on its stake in Occidental Petroleum. The results highlight the company's exposure to sector-specific risks, particularly in the volatile energy market.
The fourth-quarter operating profit saw a significant drop of over 29% to $10.2 billion from $14.56 billion in the same period last year. This was largely due to a 54% plunge in insurance underwriting profits, which fell to $1.56 billion from $3.41 billion. For the full year of 2025, operating profit totaled $44.49 billion, a decrease from $47.44 billion in the previous year. The annual insurance underwriting profit also saw a decline, dropping to $7.26 billion from $9 billion. This report marks the final quarter with Warren Buffett as CEO, who has now been succeeded by Greg Abel. Buffett remains as chairman, and Abel has expressed his commitment to maintaining the company's established financial discipline and culture. Berkshire's investment in Occidental Petroleum, a 26.9% stake, was written down by $4.5 billion. The company stated this reflects the belief that the oil company's declining stock price was not temporary, although it does not intend to sell its shares. The conglomerate's cash reserves decreased slightly to $373.3 billion from a record $381.6 billion in the third quarter. Despite the drop in profits, this substantial cash position provides new CEO Greg Abel with significant capital for potential acquisitions. In 2025, Berkshire Hathaway's Class A shares experienced a 10% rise, which underperformed the S&P 500's 16.4% increase. Since the announcement of Buffett's stepping down, Berkshire's shares have lagged behind the S&P 500.
