Operating profits at Berkshire Hathaway Inc. fell nearly 30% in Warren Buffett's last quarter as chief executive officer, as insurance underwriting earnings slumped.
That metric fell by more than 54%, and the company warned of potential future challenges to the business because of strong competition and rising claims. Berkshire also took a $4.5 billion impairment on its Kraft Heinz Co. and Occidental Petroleum Corp. holdings.
“Our investment in Kraft Heinz has been disappointing,” CEO Greg Abel said in his inaugural letter to shareholders Saturday. “Even after considering the preferred equity component in our original Heinz investment, our return has been well short of adequate.”
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Berkshire's cash pile stood at $373.3 billion, down from $381.7 billion in the previous quarter. The conglomerate's earnings are closely watched because its stable of businesses, ranging from insurance to rail, energy and manufacturing, provides a snapshot of the health of the US economy.
Its annual insurance underwriting pre-tax earnings fell 17% in 2025 from a year ago.
Lower interest rates impacted the firm's proceeds from its cash pile, with insurance interest and other investment income falling 11.9% over the last year.
No buybacks
The firm declined to buy back its own shares for the sixth straight quarter, even after the stock fell 6.5% after Buffett announced in May that he would step down as CEO at the end of 2025.
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Abel reaffirmed his predecessor's guidance regarding shareholder returns, saying the firm will buy back its own shares when he believes, after consulting Buffett, that they trade below their intrinsic value.
He also said the firm will abstain from paying a dividend as long as “more than one dollar of market value for shareholders is reasonably likely to be created by each dollar of retained earnings.”
The board reviews the shareholder return policy every year.
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