In the fourth quarter of 2025, Berkshire Hathaway reported operating earnings of $10.2 billion, a drop of more than 29% from $14.56 billion a year earlier. The decline was driven largely by weaker results in the conglomerate’s insurance operations and lower investment returns in that segment. The quarter was the final one reported under Warren Buffett as CEO; Greg Abel assumed day-to-day leadership in 2026 while Buffett remains chairman. Berkshire also disclosed a $4.5 billion impairment tied to stakes in Kraft Heinz and Occidental Petroleum, which affected overall net earnings.
Key Takeaways
- Operating earnings for Q4 2025 were $10.2 billion, down over 29% from $14.56 billion in Q4 2024.
- Insurance underwriting profits fell 54% to $1.56 billion from $3.41 billion year-over-year.
- Insurance investment income for Q4 fell nearly 25% to $3.1 billion from $4.088 billion in the prior year quarter.
- Full-year 2025 operating earnings totaled $44.49 billion, down from $47.44 billion in 2024.
- Overall (GAAP) Q4 earnings were $19.2 billion versus $19.7 billion a year earlier; full-year overall earnings dropped to $66.97 billion from $89.0 billion.
- A $4.5 billion impairment on Kraft Heinz and Occidental holdings reduced reported net earnings but did not change Berkshire’s stated long-term approach to capital allocation.
- Cash on hand slipped to $373.3 billion from a record $381.6 billion in Q3 2025; Class A shares rose 10% in 2025 versus the S&P 500’s 16.4% gain.
Background
Berkshire Hathaway is a diversified conglomerate whose results are often driven by its insurance businesses, large equity investments and wide array of operating subsidiaries. Insurance underwriting and investment returns have historically produced volatile quarterly swings because underwriting cycles and market valuations move independently. For many years Warren Buffett served as CEO and his investment and capital-allocation decisions shaped Berkshire’s strategy; the company’s compounded annual gain since 1965 is 19.7%, producing overall shareholder returns that widely outpaced the S&P 500 over the same span.
The 2025 reporting cycle unfolded against a backdrop of shifting leadership: Buffett announced at the annual shareholders meeting in Omaha on May 3, 2025 that he would step down as CEO, and Greg Abel took operational control starting in 2026. Berkshire’s scale—including a cash hoard that reached a record $381.6 billion in Q3 2025—gives it flexibility to pursue acquisitions or buybacks, though Buffett historically has been cautious about repurchasing shares. Investors and analysts therefore focus not only on quarterly GAAP gains but on operating earnings and insurance metrics to understand underlying business health.
Main Event
The company reported operating earnings of $10.2 billion for Q4 2025, a decline of more than 29% from $14.56 billion in Q4 2024, with insurance the principal source of weakness. Insurance underwriting profits dropped sharply—54% year-over-year—to $1.56 billion, reflecting narrower underwriting margins and higher loss costs in the period. Insurance investment income also softened, sliding nearly 25% to $3.1 billion from $4.088 billion, as market returns for invested float declined relative to the prior-year quarter.
On a GAAP basis, Berkshire’s Q4 overall earnings were $19.2 billion compared with $19.7 billion a year earlier. The quarter included a $4.5 billion impairment tied to the company’s holdings in Kraft Heinz and Occidental Petroleum; investment gains in the period were reported at $13.5 billion. For the full year, overall earnings fell to $66.97 billion from $89.0 billion in 2024, while full-year operating earnings eased to $44.49 billion from $47.44 billion.
Full-year insurance underwriting profits were $7.26 billion in 2025, down from $9.0 billion in 2024, and insurance investment income for the year declined to $12.5 billion from $13.6 billion. Berkshire ended the quarter with cash of $373.3 billion—slightly below the Q3 2025 record—while management again refrained from significant share buybacks in Q4. In his first annual letter as CEO, Greg Abel emphasized continuity of the company’s capital discipline and financial-strength culture.
Analysis & Implications
The Q4 results highlight the sensitivity of Berkshire’s near-term operating performance to the insurance cycle and to the mark-to-market swings in its invested assets. Insurance underwriting is inherently cyclical; a 54% drop in quarterly underwriting profit signals either higher claims or a strategic pullback in underwriting exposure. Investors should separate those insurance dynamics from the longer-term returns generated by Berkshire’s operating businesses and equity portfolio.
The reported $4.5 billion impairment amplifies headline volatility in GAAP net earnings, a point Berkshire itself has long made when advising shareholders to focus on operating results and long horizons. Impairments can reflect persistent declines in fair value or changes in management intent for a holding; they reduce reported net income but do not necessarily alter cash flow from the underlying businesses. For long-term shareholders, Berkshire’s historical compounded returns and diversified cash-generating operations remain central metrics.
Leadership transition adds another layer of investor attention. Greg Abel’s pledge to maintain capital discipline and the firm’s financial-strength orientation is intended to reassure markets that allocation principles will persist. Yet any shift in acquisition appetite, buyback policy, or risk tolerance under new operational leadership could gradually reshape return dynamics. Analysts will watch capital deployment (acquisitions vs buybacks), insurance combined ratios, and the size and composition of the cash hoard for signs of strategic change.
Comparison & Data
| Metric | Q4 2025 | Q4 2024 | Full-year 2025 | Full-year 2024 |
|---|---|---|---|---|
| Operating earnings | $10.2B | $14.56B | $44.49B | $47.44B |
| Insurance underwriting profit | $1.56B | $3.41B | $7.26B | $9.0B |
| Insurance investment income | $3.1B | $4.088B | $12.5B | $13.6B |
| Overall (GAAP) earnings | $19.2B | $19.7B | $66.97B | $89.0B |
| Cash on hand (Q-end) | $373.3B | N/A | N/A | $381.6B (Q3 2025) |
| Reported impairment | $4.5B | — | — | — |
The table isolates operating and GAAP measures to help readers distinguish between recurring operating performance and short-term investment or accounting-driven swings. Operating earnings exclude many market-driven gains and losses; GAAP overall earnings reflect them, producing wider year-to-year variation. For investors focused on durable earnings power, operating earnings and insurance underwriting performance are typically more informative than quarterly GAAP fluctuations.
Reactions & Quotes
Company commentary reiterated a long-standing view that short-term investment mark-to-market activity can be misleading for investors evaluating earnings on a per-quarter basis. Berkshire’s earnings release stressed the difference between operating results and transient market gains or losses.
The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.
Berkshire Hathaway (earnings release)
Greg Abel used his first annual letter as CEO to promise continuity in capital allocation and the firm’s conservativism on balance-sheet strength, aiming to reassure investors unsettled by headline swings and leadership change.
We will continue the culture of financial strength and capital discipline that has guided Berkshire over decades.
Greg Abel (annual letter)
Unconfirmed
- Whether the impairments on Kraft Heinz and Occidental reflect permanent strategic shifts by Berkshire or short-term valuation adjustments remains unclear; company commentary did not provide itemized rationale in the earnings release.
- The precise timing or scale of any acquisition activity under Greg Abel’s operational leadership in 2026 has not been announced and remains speculative.
- Market commentary on whether Berkshire will increase buybacks later in 2026 is unconfirmed; management reiterated caution but gave no forward buyback commitment.
Bottom Line
Berkshire Hathaway’s Q4 2025 operating earnings decline underscores the company’s exposure to insurance-cycle volatility and quarterly investment swings. While GAAP earnings were partly affected by a $4.5 billion impairment, operating measures and underwriting profit shifts provide clearer signals about near-term business performance. The slip in full-year operating earnings to $44.49 billion from $47.44 billion suggests modest pressure across insurance and investment income in 2025, though Berkshire’s balance sheet and cash position remain substantial.
The leadership transition to Greg Abel adds strategic attention but, based on the company’s statements, not an immediate change in capital-allocation philosophy. Investors should monitor underwriting margins, insurance investment returns and how Berkshire deploys its large cash balance for signs of evolving priorities. For long-term holders, Berkshire’s decades-long compounded returns remain a foundational context, but quarterly variability reinforces the importance of multi-year perspective.