Berkshire Hathaway Profits Decline

Berkshire Hathaway's operating profit saw a significant downturn, falling over 29% to $10.2 billion in the final quarter of 2025, compared to $14.56 billion in the same period of the previous year. For the full year, operating earnings also declined by 6% to $44.49 billion. The insurance division, a cornerstone of Berkshire's operations, experienced a notable drop in performance. Insurance underwriting profits plummeted by 54% in the fourth quarter, and income from insurance investments also saw a nearly 25% decline. A significant factor impacting the insurance business was a year of substantial natural catastrophe claims. The insurance industry faced over $100 billion in losses from natural disasters in 2025 for the sixth consecutive year, with events like the Los Angeles wildfires in January and severe convective storms in the U.S. contributing to the high claims. The company also recorded a $4.5 billion writedown on its investment in Occidental Petroleum. This impairment reflects concerns over the decline in the oil company's stock price. Occidental's stock has been under pressure due to falling oil prices and a high debt load following its acquisition of CrownRock. This earnings report marks a transitional period for the conglomerate, being the last under the leadership of Warren Buffett as CEO. His successor, Greg Abel, took the helm at the beginning of 2026 and, in his first letter to shareholders, pledged to uphold the company's long-standing culture of financial discipline. Despite the profit decline, Berkshire Hathaway's cash reserves remain substantial, ending the year at $373.3 billion. However, the company did not engage in any share buybacks during the fourth quarter.