Berkshire Hathaway reported a sharp decline in its fourth-quarter operating income, driven in large part by weakness in the conglomerate’s insurance business.
Operating income totaled $10.2 billion in the fourth quarter. That’s a decline of more than 29% from $14.56 billion in the same period last year.
This was the last quarter under Warren Buffett as CEO, who announced his resignation at last May’s annual meeting. Greg Abel took the lead heading into 2026, pledging in Berkshire’s annual earnings letter on Saturday to continue the culture of financial strength and capital discipline built by Buffett. Buffett remains chairman.
Insurance profits fell 54% to $1.56 billion from $3.41 billion a year earlier. Insurance investment income fell nearly 25% from $4.088 billion to $3.1 billion.
For full-year 2025, operating income totaled $44.49 billion. That’s down from $47.44 billion the year before.
Insurance profits were $7.26 billion, down from $9 billion in 2024. Insurance investment income fell to $12.5 billion this year from $13.6 billion last year.
Total income, which includes gains or losses from the conglomerate’s stock market investments, fell slightly to $19.2 billion in the fourth quarter, compared with $19.7 billion a year earlier. However, those numbers were hurt by a $4.5 billion impairment on Berkshire’s investments in Kraft Heinz and Occidental Petroleum. Investment profits amounted to $13.5 billion.
Total profit for the full year fell to $66.97 billion from $89 billion a year ago. Of course, Berkshire always advises investors to pay little attention to the performance of their investments over short periods of time.
“The amount of investment gains (losses) in a given quarter is typically meaningless and provides net income per share figures that can be extremely misleading to investors who have little or no knowledge of accounting standards,” the company said in its earnings release.
No repurchases, cash balance declines slightly
Buffett again refrained from buying back Berkshire shares, even though the fourth quarter ended at zero. Despite a lack of buybacks, the conglomerate’s cash balance fell to $373.3 billion from a record $381.6 billion in the third quarter.
Berkshire Hathaway’s Class A shares rose 10% in 2025, underperforming the S&P 500’s gain of 16.4. Still, Buffett’s leadership has resulted in unprecedented wealth creation for shareholders.
Since 1965, Berkshire Hathaway has recorded a total annual profit of 19.7%. That’s almost double the S&P 500’s total gains over that period. Berkshire’s total profits exceeded 6,000,000% during that period, while the S&P 500, including dividends, gained just 46,061%, Abel noted in his first annual letter to shareholders as CEO.