Warren Buffett’s Berkshire Hathaway reported a significant writedown on its stake in Kraft Heinz, marking a rare disappointment for the conglomerate’s leader. The company took an after-tax writedown of $3.76 billion on its 27.4% stake in Kraft Heinz, citing economic and uncertainty as reasons.
The move follows a struggling food company’s announcement that it would consider strategic alternatives, including a potential breakup. Berkshire had carried the investment on its books at above-market value but deemed the gap “other-than-temporary.”
Berkshire’s second-quarter operating profit fell 4% due to lower gains from common stocks and a decline in insurance underwriting premiums. The company reported a net income of $12.37 billion, down 59% from the same period last year.
Despite the disappointing results, Berkshire remains cautious about market valuations amid uncertainty about tariffs and growth in the broader economy. The company’s cash stake stood at near-record $344.1 billion as of mid-July.
Analysts view Buffett’s decision to step down as chief executive at year-end as a significant event, potentially impacting the premium embedded in Berkshire’s stock price due to his presence. The lack of new investments has also been a concern, with some analysts predicting slower growth in the insurance sector.
Berkshire’s conglomerate portfolio includes several insurers, electric utility and renewable energy businesses, chemical and industrial companies, and consumer brands like Dairy Queen and See’s Candies. The company’s BNSF unit reported a 19% gain in quarterly profit, while Geico saw a 2% increase in pre-tax underwriting profit despite facing competition from State Farm and Progressive.
The writedown marks a rare disappointment for Buffett, who has led the company since 1965. Analysts rate Berkshire “hold” and predict that the market will continue to scrutinize the conglomerate’s results amid uncertainty about trade policies and growth in the broader economy.
Source: https://nypost.com/2025/08/03/business/berkshire-takes-3-8-billion-kraft-heinz-writedown-profit-falls