Berkshire Hathaway Profits Fall
Warren Buffett's Berkshire Hathaway reported a drop in quarterly profit, dragged down by weakness in its insurance operations. The conglomerate also took a writedown on its holdings in Occidental Petroleum, highlighting the impact of market volatility and inflation on its diverse portfolio.
The conglomerate's operating earnings for the fourth quarter of 2025 fell by over 29% to $10.2 billion, compared to $14.56 billion in the same period of the prior year. For the full year, operating profits saw a 6% decline to $44.49 billion. A significant driver of this downturn was the insurance division, where underwriting profits plunged 54% to $1.56 billion from $3.41 billion a year earlier. Additionally, income from insurance investments dropped by nearly 25%. The company recorded a $4.5 billion impairment charge on its investment in Occidental Petroleum, stating the decline in the oil company's stock price was not considered "temporary." This follows another significant writedown of $3.76 billion on its Kraft Heinz investment earlier in 2025. Despite the weaker earnings, Berkshire Hathaway's cash hoard remains substantial, ending the year at $373.3 billion. This provides significant capital for future acquisitions and investments under the new leadership. This earnings report was the last under Warren Buffett's tenure as CEO. His successor, Greg Abel, who took over at the start of 2026, has emphasized his commitment to maintaining the company's established culture of financial strength and capital discipline in his first annual letter.
