Q2 operating profit falls as insurance weakens
Berkshire Hathaway reported a 4% drop in second-quarter operating earnings, totaling $11.16 billion. The decline was primarily driven by weaker insurance underwriting results, though other segments — including railroads, energy, manufacturing, and retail — posted year-over-year gains.
The results mark a slight slowdown for Warren Buffett’s conglomerate, which has remained a bellwether for U.S. economic health. Despite resilience in several business lines, the overall earnings dip underscores the toll of broader macroeconomic pressures.
Trump tariffs spark investor caution
A key concern in Berkshire’s earnings report was the continued impact of escalating U.S. tariffs. The company flagged significant uncertainty stemming from international trade policies enacted under President Donald Trump. The report warned of “adverse consequences” on most of its operations and equity investments if trade tensions continue to mount.
Berkshire noted that the pace of policy changes had quickened in the first half of 2025, leaving businesses exposed to rising input costs and global market volatility. The conglomerate holds major stakes in industries sensitive to global trade, including industrials, consumer goods, and logistics.
Cash pile remains near record high
Despite earnings headwinds, Berkshire’s financial position remains robust. The company ended the quarter with $344.1 billion in cash — just shy of its March peak. It also continued to reduce its stock holdings, selling $4.5 billion worth of equities over the past six months. This marked the 11th consecutive quarter of net stock sales.
Notably, Berkshire did not repurchase any of its own shares in the first half of 2025, even as the stock fell over 10% from its all-time high. The lack of buybacks suggests caution as market conditions remain volatile and trade uncertainty clouds the outlook.
Kraft Heinz write-down and leadership shift
Berkshire took a $3.8 billion write-down on its longstanding investment in Kraft Heinz. The consumer goods firm has been under pressure and is reportedly exploring a spinoff of its grocery division. Two Berkshire-appointed directors stepped down from Kraft Heinz’s board in May, signaling a shift in involvement.
This earnings update also marks the first since Warren Buffett announced his plan to step down as CEO at the end of 2025. Greg Abel, vice-chair of non-insurance operations, will assume the CEO role, while Buffett remains chairman of the board. The transition adds a layer of change to a company already navigating economic and policy headwinds.
