Buffett's "Final Act": Berkshire Hathaway Q4 Operating Profit Drops 30% with Cash Reserves Exceeding $370 Billion

Caixin News, February 28 (Editor: Xia Junxiong) Local time Saturday (February 28), legendary investor and “Stock God” Warren Buffett’s Berkshire Hathaway announced its Q4 2025 financial report. Due to weak performance in the insurance business, Berkshire’s operating profit for the fourth quarter declined significantly.

The financial report shows that Berkshire’s Q4 operating profit was $10.2 billion, down more than 29% from $14.56 billion in the same period last year.

Specifically, Berkshire’s insurance underwriting operating profit in Q4 decreased by 54% year-over-year, from $3.41 billion to $1.56 billion; insurance investment operating profit also fell nearly 25%, from $4.088 billion to $3.1 billion.

For the full year, Berkshire’s 2025 operating profit was $44.49 billion, lower than $47.44 billion in the previous year; annual insurance underwriting operating profit was $7.26 billion, down from $9 billion; insurance investment operating profit was $12.5 billion, down from $13.6 billion.

Berkshire’s Q4 net profit dropped from $19.69 billion in the same period last year to $19.2 billion, a decline of 2.5%. This figure was affected by $4.5 billion in impairments related to investments in Kraft Heinz and Western Oil, with investment income for the quarter at $13.5 billion.

The overall net profit for 2025 was $66.97 billion, down from $89 billion in the previous year. Berkshire repeatedly reminds investors not to focus too much on its short-term investment performance.

The company stated in the financial report: “Any quarterly investment gains (or losses) are generally of little significance and can be highly misleading to investors unfamiliar with accounting rules when it comes to per-share net profit data.”

Buffett has previously said that operating profit is a more appropriate measure of a company’s performance. According to accounting rules, Berkshire must include unrealized gains and losses of its large investment portfolio in net profit, which can cause significant fluctuations in quarterly profits due to short-term market volatility.

For the full year of 2025, Berkshire was a net seller of stocks. The company’s cash reserves decreased from a record $381.6 billion in Q3 to $373.3 billion.

This is Buffett’s last quarter as CEO of Berkshire at age 95, as he will hand over the CEO position to long-time deputy Greg Abel at the end of 2025. Buffett will remain Chairman of Berkshire.

In January this year, with Abel officially taking over, the company, closely tied to Buffett’s outstanding investment philosophy, entered a new era. In his annual letter to shareholders released alongside Saturday’s financial report, he pledged to continue the culture of financial prudence and capital discipline established by Buffett.

On May 2 last year, just before Buffett announced his retirement as CEO, Berkshire’s Class A shares hit a record high of $809,350. Since then, the stock has fallen 6.5%, closing at $757,000 on Friday.

In 2025, Berkshire’s Class A shares increased by 10%, lagging behind the S&P 500 index’s 16.4% gain.

In his first letter to shareholders, Abel pointed out that since Buffett took control of the company in 1965, Berkshire has achieved an average annual compound growth rate of 19.7%, nearly double that of the S&P 500 index during the same period. During this time, Berkshire’s cumulative increase exceeded 60,000 times, while the S&P 500, including dividends, grew by only 46,061% (about 460 times).