Berkshire Hathaway's Operating Earnings Drop Nearly 30% in Buffett's Last Quarter as CEO

Berkshire Hathaway (NYSE: BRK.B) wrapped up 2025 with a notable slowdown in operating earnings, clocking in at $10.2 billion for the fourth quarter. That's a steep drop of more than 29% compared to the same period last year, when it posted $14.56 billion.

The insurance segment, a longtime pillar of the conglomerate, took a particularly hard hit. Underwriting profits plummeted 54%, sliding to $1.56 billion from $3.41 billion a year earlier. Investment income from insurance also dropped nearly 25%, falling to $3.1 billion from $4.09 billion, reflecting tougher market conditions.

This quarter also marks the end of an era, as Warren Buffett stepped down as CEO following the company's annual shareholders meeting last May. Greg Abel stepped into the role at the start of 2026, promising to maintain the financial discipline and capital strength that have become synonymous with Berkshire's operations.

Looking at the full-year numbers, Berkshire's operating earnings totaled $44.49 billion in 2025, down from $47.44 billion in 2024. Insurance underwriting profits declined to $7.26 billion from $9 billion, and insurance investment income slipped to $12.5 billion from $13.6 billion the previous year.

Despite the drop in operating earnings, overall earnings including investment gains and losses remained relatively steady in Q4, slightly retreating to $19.2 billion from $19.7 billion a year earlier. This figure, however, was affected by a $4.5 billion impairment tied to holdings in Kraft Heinz and Occidental Petroleum. Investment gains alone were $13.5 billion.

Over the course of the year, overall earnings dropped noticeably to $66.97 billion from $89 billion in 2024. Berkshire reminded investors that quarterly investment gains and losses can swing widely and don't always reflect the underlying strength of the company's core businesses.

Another point of note: Despite holding a massive cash pile - which dipped modestly to $373.3 billion from the Q3 peak of $381.6 billion - Buffett refrained from buying back shares in the final quarter. Berkshire Shayres ended 2025 up about 10%, trailing behind the broader S&P 500's 16.4% gain for the year.

Still, the aggregate results since Buffett took the reins are staggering. The firm's compounded annual gains since 1965 stand at 19.7%, nearly double the S&P 500's 9.8% over that span. That translates to a jaw-dropping total growth exceeding 6,000,000% compared to the S&P's 46,061%, including dividends-a metric Abel highlighted in his first letter as CEO.