Berkshire Hathaway Profits Fall Short
Berkshire Hathaway reported a drop in quarterly profit that missed analyst expectations. The conglomerate cited weakness in its core insurance operations and a writedown on its investment in Occidental Petroleum as key drags on performance.
The drop in operating profit translates to a roughly 30% decrease, falling to $10.2 billion for the quarter from $14.53 billion a year earlier. For the full year, operating profit saw a 6% decline to $44.49 billion. The weakness in insurance, a core Berkshire division, was significant. Profits from insurance underwriting plunged 54% to $1.56 billion, while income from investing insurance premiums fell by nearly 25%. The company cited pricing pressures and a potential slowdown in writing new property and casualty business. A major factor in the results was a $4.5 billion impairment charge related to Berkshire's investments in Occidental Petroleum and Kraft Heinz. The company stated the writedown on Occidental was because it no longer considers the oil company's stock decline to be "temporary." This earnings report marks the end of an era, as it was the final quarter with Warren Buffett as CEO. His successor, Greg Abel, officially took the reins at the start of 2026, with Buffett remaining as chairman. In his first annual letter to shareholders, Abel paid tribute to Buffett and pledged to maintain the company's financial discipline and culture. Despite the profit dip, the conglomerate's massive cash pile remains substantial, ending the year at $373.3 billion. While some segments like the BNSF railroad and manufacturing saw modest gains, it wasn't enough to offset the insurance and investment headwinds. For the sixth straight quarter, the company did not buy back any of its own shares.
