Berkshire Hathaway experienced a historic decline in its earnings from the first quarter of 2025. Despite a strong backlog and record revenue, the company missed the market’s estimates as the company continued to deal with persistent macroeconomic headwinds. Collectively overall earnings tanked almost 64% compared to the same time last year. This decline was primarily caused by foreign exchange losses and a sharp deterioration in insurance underwriting profits.
For the first quarter of the year, Berkshire Hathaway’s operating earnings were down 14% to $9.64 billion. The company took a $713 million hit from currency swings. This was compounded by the fact that the dollar index fell almost 4% over the course of the quarter.
The company’s insurance sector had an especially brutal quarter. It was painful on the bottom line, as underwriting profit crashed by 48.6%, falling to $1.34 billion in the first quarter. This drop is due to a number of factors. In fact, as a point of reference, the seven Southern California wildfires this past fall resulted in an insured loss estimate of $1.1 billion.
The other side of that coin was Berkshire Hathaway’s equally disappointing second quarter earnings. It experienced its cash reserves shoot up to nearly a record of over $347 billion. This buildup of cash reserves is frankly remarkable. It reflects, he expounded, that the corporation is taking a conservative approach to financing an uncertain economic priorities.
Class B shares had operating earnings of $4.47 per Class B share. That’s down from $5.20 over the summer in 2022. In comparison, Berkshire Hathaway’s Class A shares have performed the opposite way, up almost 19% so far in 2025. It further reflects a growing separation between the company’s stock price and its earnings per quarter.
Berkshire Hathaway’s third-quarter results highlight the threat that geopolitical risks and sudden shifts in international trade policy demand. The uncertainty caused by President Donald Trump’s tariffs has proved expensive for the conglomerate. This changing and often chaotic environment is impacting both investor sentiment and operational strategy.
“Our periodic operating results may be affected in future periods by impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events,” – Berkshire Hathaway
The management of the company readily admitted their inability to forecast future effects on their business from such uncontrollable elements. They stated, “The pace of changes in these events, including international trade policies and tariffs, has accelerated in 2025. Considerable uncertainty remains as to the ultimate outcome of these events.”
Berkshire Hathaway noted that their status as a net seller of stocks for ten consecutive quarters reflects a cautious approach amid prevailing uncertainties. Continued commitment At the annual meeting, the new conglomerate’s leadership told shareholders to stay tuned for long-term value creation and not get distracted by quarterly fluctuations.
“The amount of investment gains (losses) in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” – Berkshire Hathaway
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