Berkshire Hathaway's Q2 2025 earnings report: A detailed look

Berkshire Hathaway's Q2 2025 earnings report: A detailed look

Berkshire Hathaway's Q2 2025 earnings, released on August 2, 2025, revealed a complex picture of declining net earnings while operating earnings saw a modest dip, impacted by factors like lower investment gains, foreign exchange losses, and a significant write-down of its stake in Kraft Heinz.

Here's a breakdown of the key figures and factors:

• Net Earnings: Attributable to shareholders totaled $12.37 billion, a significant drop from $30.35 billion in Q2 2024. This decline was largely driven by a reduction in investment gains, according to Insurance Business America.

• Operating Earnings: Declined by 3.8% year-over-year to $11.16 billion, according to Yahoo Finance. This reflects the performance of Berkshire's wholly-owned businesses.

• Impact of Foreign Exchange Losses: After-tax operating profit was negatively impacted by $877 million in foreign exchange losses due to Berkshire's U.S.-dollar denominated debt. Without this impact, operating profit would have increased by 8%.

• Earnings per Class A Share: Decreased to $8,601 from $21,122 in Q2 2024.

Segment performance

• Insurance Underwriting: Saw a 12% year-over-year decline to $2 billion, which was the main reason for the overall drop in operating earnings. This contrasted with a strong Q2 2024 for the insurance sector.

• Insurance-Investment Income: Increased, helping to partially offset the decrease in underwriting earnings.

• Railroad, Utilities, and Energy: Operating revenues slightly decreased, but pre-tax earnings for the Railroad segment rose due to lower operating expenses.

• Manufacturing, Service, and Retailing: Total revenues decreased, while pre-tax earnings increased.

Investment portfolio and cash position

• Kraft Heinz Write-Down: Included a significant $3.76 billion after-tax impairment charge on the Kraft Heinz investment, impacting net earnings. Berkshire still holds a 27.4% stake but is no longer on the board.

• Investment Gains: Were significantly lower at $4.97 billion compared to the previous year.

• Stock Sales: Berkshire continued to be a net seller of stocks, selling $4.5 billion in equities in the first half of 2025.

• Cash Reserves: Remained near a record high at $344.1 billion, although some reports indicated a slight decrease from the previous quarter.

• Share Repurchases: Berkshire did not repurchase any shares in the first six months of 2025.

Leadership transition and outlook

• Leadership Change: This was the first earnings report since Warren Buffett announced his plan to step down as CEO at the end of 2025, with Greg Abel named as successor.

• Future Outlook: The report highlighted potential negative impacts from President Trump's tariffs and the accelerating pace of global economic and geopolitical changes.

Berkshire Hathaway's Q2 2025 earnings saw lower net earnings due to reduced investment gains and the Kraft Heinz write-down, while operating earnings dipped slightly, mainly from weaker insurance underwriting. The company continued selling stocks and did not repurchase shares, despite holding large cash reserves. The upcoming leadership change and global uncertainties like unpredictable Trump tarrif also influenced the outlook.