TLDR
- Berkshire Hathaway’s operating earnings dropped 4% to $11.16 billion in Q2 2025 due to lower insurance profits
- The company sold $3 billion more stocks than it bought, marking the 11th straight quarter as a net seller
- Berkshire holds a record-high $344 billion in cash as Warren Buffett struggles to find attractive investments
- The conglomerate wrote down its Kraft Heinz stake by $3.8 billion as the food company considers spinning off its grocery business
- This marks Buffett’s first earnings report since announcing he will step down as CEO at year-end, with Greg Abel taking over
Warren Buffett’s Berkshire Hathaway delivered mixed results in its second quarter earnings report. The conglomerate posted operating earnings of $11.16 billion, down 4% from the same period last year.
The decline came primarily from weaker insurance underwriting profits. However, several other divisions showed strength during the quarter.
BNSF Railway reported higher profits compared to last year. Berkshire Hathaway Energy also delivered improved results.
The manufacturing, service, and retailing divisions all posted gains. These increases helped offset some of the insurance weakness.
Currency exchange losses also hurt the bottom line. Berkshire recorded an $877 million foreign exchange loss tied to non-dollar debt.
This represented a sharp swing from the $446 million gain in the same quarter last year. The currency headwinds added pressure to overall results.
Stock Selling Streak Continues
Berkshire remained a net seller of stocks for the 11th consecutive quarter. The company sold $6.9 billion worth of shares while purchasing only $3.9 billion.
This resulted in net stock sales of $3 billion during the quarter. Buffett has been trimming positions as he struggles to find attractive investments.
The Oracle of Omaha refrained from buying back any Berkshire shares. The company’s stock has declined more than 10% from its record high.
High valuations across public and private markets have limited opportunities. Berkshire’s cash pile now sits at $344 billion, near record levels.
This cash hoard exceeds the market capitalization of major companies like Coca-Cola and Bank of America. The massive war chest reflects Buffett’s cautious approach in today’s expensive market.
Kraft Heinz Writedown Hits Results
Berkshire wrote down its Kraft Heinz stake by approximately $3.8 billion. The food company has been a long-term underperformer in Berkshire’s portfolio.
The writedown reduced the carrying value of the 27% stake to $8.4 billion. Kraft Heinz has been exploring a potential spinoff of its grocery business.
Two Berkshire executives resigned from Kraft Heinz’s board in May. The resignations came as the food company evaluates strategic options.
David Kass, a finance professor at the University of Maryland, called the writedown “surprising.” He suggested it might be related to Buffett’s upcoming departure as CEO.
The earnings report comes at a transition period for Berkshire. Buffett announced earlier this year he would step down as CEO at the end of 2025.
Greg Abel, currently vice-chairman of non-insurance operations, will take over as CEO. Buffett will remain as chairman of the board.
The 94-year-old investor turns 95 this month. His planned succession has been closely watched by investors and analysts.
Berkshire stock has underperformed the S&P 500 in recent months. Some experts attribute this to the loss of a “Buffett premium” as his departure approaches.
The company also warned about potential tariff impacts on its various businesses. President Trump’s trade policies create uncertainty for Berkshire’s operations.
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