Berkshire Hathaway’s second-quarter earnings fell short of expectations, but the conglomerate’s underlying performance was more resilient than anticipated. The company’s operating earnings declined by 4% year-over-year, primarily due to a decline in insurance underwriting and lower profits at its non-insurance businesses.
However, Berkshire’s insurance segment remains a bright spot, with operating earnings rising 13% year-over-year, excluding the impact of foreign exchange volatility. The BNSF railroad’s productivity improvement drove significant growth, while the manufacturing, service, and retailing segments showed unexpected resilience.
GEICO, one of Berkshire’s crown jewels, appears to be back in profitable growth mode, with policies in force continuing to rise. The company’s insurance float increased by $3 billion, providing a cushion for its investments.
Berkshire’s stock price underperformed the S&P 500 in the first quarter but has since recovered, driven by expectations of future value creation through share repurchases and capital allocation decisions.
Warren Buffett’s leadership style emphasizes long-term focus, with a goal to “increase operating earnings,” “decrease shares outstanding,” and “hope for an occasional big opportunity.” Berkshire’s financial resilience, led by its fortress balance sheet and cash hoard, enables it to weather potential crises and capitalize on opportunities during downturns.
As Buffett prepares to step down as CEO, investors should take comfort in the company’s well-positionedness, driven by its proven track record of value creation and leadership.
Source: https://www.forbes.com/sites/bill_stone/2025/08/02/takeaways-from-berkshire-hathaways-second-quarter-2025-earnings