Berkshire Hathaway Profits Decline
Berkshire Hathaway reported a drop in quarterly profit, citing weakness in its insurance operations. The company also took a writedown on its Occidental Petroleum investment. Vice Chairman Greg Abel acknowledged mounting headwinds in the insurance sector and volatility in energy holdings.
The fourth-quarter operating earnings plummeted by over 29% to $10.2 billion compared to the same period in the prior year. For the full year 2025, operating earnings saw a 6.2% decline to $44.49 billion. This marks a challenging start for Greg Abel, who took over as CEO from Warren Buffett at the beginning of 2026. A significant driver of this downturn was the insurance division, a cornerstone of Berkshire's operations. Insurance underwriting profits experienced a dramatic 54% drop in the fourth quarter, falling to $1.56 billion from $3.41 billion a year earlier. Investment income from the insurance sector also slid by nearly 25%. The company's investment in Occidental Petroleum led to a $4.5 billion impairment charge. Berkshire indicated that the decline in the oil giant's stock price was not considered temporary, prompting the writedown of its 26.9% stake. This is the second writedown in 2025, following a $3.76 billion charge related to its Kraft Heinz investment. Despite the downturn in some key areas, other segments of the vast conglomerate showed resilience. The manufacturing, retail, and service businesses reported modest gains for the year. Meanwhile, Berkshire's massive cash hoard remained substantial at $373.3 billion, providing ample capital for future investments under the new leadership.
