Warren Buffett, Chairman of Berkshire Hathaway, was present at the company’s annual shareholders' meeting held in Omaha, Nebraska. (Photo: Scott Morgan/Reuters via CNN Newsource)
Warren Buffett’s Berkshire Hathaway reported a nearly 4% dip in its second-quarter operating earnings, signalling a slight slowdown in the financial giant’s performance as Buffett prepares to step away from his long-held leadership role.
The company, known for its wide range of investments—from insurance to railroads—earned $11.16 billion in operating profit for the quarter ending in June. That’s down from $11.6 billion during the same time last year. For the first half of the year, operating earnings were reported at $20.8 billion—marking an 8.8% decline compared to last year’s figures.
This marks the first quarterly report since Buffett, 94, confirmed he will step down as CEO by year-end. He named Greg Abel, Berkshire’s vice chairman of non-insurance operations, as his successor.
Insurance Division Takes a Hit
One of Berkshire’s key sectors—insurance underwriting—posted pre-tax earnings of $2.53 billion, down nearly 11% from $2.84 billion a year ago. This decline affected overall profits and signaled tougher market conditions in the insurance space.
Cash Reserves Dip Slightly
Between May and July, Berkshire’s famous cash pile saw a minor drop. The company held $344 billion during that period, slightly less than the $347 billion it had in early May. Though still massive, the small decline reflects some strategic investments and financial activity.
Big Loss on Kraft Heinz Investment
Berkshire also revealed a $3.8 billion loss tied to its stake in Kraft Heinz. Buffett had already admitted in a 2019 interview that the deal hadn’t played out as expected, saying he had “been wrong in a couple of ways” regarding that investment.
Tariffs and Trade Tensions Add Pressure
In its report, Berkshire pointed to global trade tensions, particularly those tied to U.S. President Donald Trump’s recent tariff hikes, as factors making the economic outlook more unpredictable. The company expressed uncertainty about how future global events or economic shifts might impact business operations.
Berkshire highlighted that trade disruptions have directly hurt sales at some of its apparel and toy companies. Fruit of the Loom saw an 11.7% drop in revenue, Garan fell 10.1%, and Jazwares—a toy brand—plunged 38.5%, partly due to delayed shipments caused by international trade disputes and tariff policies.
Bright Spots: Railroads and Energy
Despite several setbacks, not all divisions struggled. Berkshire’s railroad business, BNSF, saw pre-tax earnings jump 11.5%. The company’s energy arm, Berkshire Hathaway Energy, posted an 18% rise in net income compared to the same quarter last year—bringing some balance to the overall earnings picture.
Stock Performance Remains Solid
Berkshire Hathaway's Class B shares (BRK.B) ended Friday at $472.84. Despite the dip in earnings, the stock has gained 4.82% since the beginning of 2025, showing continued investor confidence even as Buffett prepares to pass the torch.
