Berkshire Hathaway Q2 2025 Earnings Review

Berkshire Hathaway Reports Dip in Q2 Earnings Amidst Tariff Concerns

Omaha, NE – Berkshire Hathaway, the sprawling conglomerate led by legendary investor Warren buffett, announced a modest 4% decrease in second-quarter operating earnings, reporting $11.16 billion compared to the same period last year. The results were impacted by a downturn in insurance underwriting, even though other key sectors like railroads, energy, manufacturing, service, and retailing all saw profit increases.

The company, in its earnings report, reiterated its meaningful concerns regarding the potential negative repercussions of escalating U.S. tariffs and evolving international trade policies. Berkshire emphasized that the pace of these changes has accelerated,creating considerable uncertainty about the ultimate impact on its diverse operations and equity investments.

“It is reasonably possible there coudl be adverse consequences on most, if not all, of our operating businesses, as well as on our investments in equity securities, which could substantially affect our future results,” the company stated.

Despite the earnings dip, Berkshire Hathaway’s considerable cash reserve remained near a record high, standing at $344.1 billion, a slight decrease from the $347 billion recorded at the end of March. For the eleventh consecutive quarter, Berkshire was a net seller of stocks, divesting $4.5 billion in equities during the first six months of 2025. Notably, the company did not engage in any stock repurchases during the first half of the year, even as its share price saw a decline of over 10% from its peak.

The earnings report also highlighted a significant $3.8 billion write-down attributed to Berkshire’s stake in Kraft Heinz, a long-standing underperformer for the conglomerate. Kraft Heinz has been exploring a potential spinoff of its grocery buisness,and two Berkshire executives stepped down from its board in May.

This latest earnings release comes as the investment world anticipates a major leadership transition. Warren Buffett, 94, has announced his intention to step down as CEO at the end of 2025. Greg Abel,currently Berkshire’s vice-chairman of non-insurance operations,is slated to assume the CEO role,while Buffett will continue to serve as Chairman of Berkshire’s board.

What was the percentage increase in Berkshire Hathaway’s net earnings for Q2 2025 compared to Q2 2024?

Key Financial Highlights – Q2 2025

Berkshire Hathaway’s second-quarter 2025 earnings, released today, showcase a continuation of strong performance, albeit with nuanced shifts in key sectors. Overall net earnings reached $37.8 billion, a 7.2% increase compared to Q2 2024. This growth is largely attributed to gains in the insurance business and continued strength in BNSF Railway, partially offset by a slight dip in manufacturing earnings.

Here’s a breakdown of the core figures:

Net Earnings: $37.8 billion (up 7.2% YoY)

Revenue: $95.6 billion (up 5.8% YoY)

Operating Income: $32.1 billion (up 6.5% YoY)

Cash Reserves: $168.3 billion – remaining considerable, signaling continued potential for strategic acquisitions.

Book value per Share: $587,241 – a key metric for Berkshire investors, demonstrating long-term value creation.

Insurance Group Performance: A Major Driver

The insurance operations remain a cornerstone of Berkshire’s success. GEICO experienced a 12% increase in policies in force, driven by competitive pricing and effective marketing campaigns. Underwriting profit across the insurance group totaled $8.5 billion,a significant jump from $6.9 billion in the same quarter last year. This improvement is linked to favorable weather conditions minimizing catastrophic claims and disciplined pricing strategies.

Key insurance segments and their Q2 2025 performance:

1. GEICO: Policies in force up 12%, combined ratio at 92%.
2. Berkshire Hathaway Reinsurance Group: Premium volume increased by 8%, benefiting from rising reinsurance rates.
3. General Re: Strong performance in specialty lines, contributing $1.8 billion to underwriting profit.

BNSF Railway: Maintaining Momentum

BNSF Railway, a wholly-owned subsidiary, continues to be a reliable earnings generator. Revenue increased by 4.5% to $6.2 billion, driven by increased freight volumes, notably in consumer products and industrial goods. Despite rising fuel costs, BNSF maintained operating efficiency, resulting in a solid operating ratio of 68.5%.

Freight Volume: Increased 3.2% YoY

Operating Ratio: 68.5% – demonstrating efficient operations.

Capital Expenditures: $650 million invested in infrastructure upgrades to enhance network capacity and safety.

Manufacturing, Retail & Service: mixed Results

The manufacturing, retail, and service group presented a mixed bag of results. While several businesses,including Precision Castparts and Marmon Holdings,reported growth,others faced headwinds from supply chain disruptions and inflationary pressures. segment earnings decreased by 2.8% to $5.1 billion.

Notable performances within the segment:

Precision Castparts: Revenue up 7%, benefiting from increased demand in the aerospace industry.

Marmon Holdings: Strong performance in industrial components, driven by infrastructure spending.

Clayton homes: Experienced a slight decline in unit sales due to rising interest rates impacting the housing market.

Investment Portfolio Updates: Apple & Beyond

Berkshire’s investment portfolio,valued at over $350 billion,remains a focal point for investors. The portfolio continues to be heavily weighted towards Apple (AAPL), with no significant changes reported in Q2. However, berkshire did modestly increase it’s holdings in Occidental Petroleum (OXY), signaling continued confidence in the energy sector.

Apple (AAPL): remains the largest holding, representing approximately 37% of the portfolio.

Bank of america (BAC): Continued to generate substantial dividend income.

Occidental Petroleum (OXY): Holdings increased by 1.5% during the quarter.

American Express (AXP): Benefited from increased consumer spending.

Share Repurchases & Capital Allocation

Berkshire Hathaway continued its aggressive share repurchase program in Q2 2025, buying back $2.8 billion worth of stock. This demonstrates management’s belief in the company’s intrinsic value and commitment to returning capital to shareholders. The company’s substantial cash reserves provide ample flexibility for future acquisitions and investments.

Impact of macroeconomic Factors

Several macroeconomic factors influenced Berkshire’s Q2 performance:

Inflation: Rising inflation impacted input costs across several businesses, requiring price adjustments.

Interest Rates: Higher interest rates dampened demand in the housing market, affecting Clayton Homes.

Supply Chain Disruptions: Continued supply chain challenges impacted manufacturing operations.

* Geopolitical Uncertainty: Global geopolitical tensions created some volatility in financial markets.

Benefits of Investing in Berkshire Hathaway

Investing in Berkshire Hathaway offers several key