Berkshire shares dip after earnings decline, lack of buybacks disappoint investors
The Omaha-based giant saw operating earnings including those from its insurance and railroad businesses decline dip 4% year over year to $11.16 billion in the second quarter. While railroad, energy, manufacturing, service and retailing all reported higher profits from a year ago, a drop in insurance underwriting dragged down overall results.
Class A and B shares of Berkshire both declined about 1% in premarket trading Monday following the results. The stock has fallen about 12% from its all-time high in early May right before the 94-year-old Buffett announced that Greg Abel is taking over as CEO at the end of 2025.
A move that caught many by surprise was a big write-down for Berkshire's underperforming Kraft Heinz stake. The conglomerate for the first time recorded a loss of $3.8 billion from its 27% Kraft Heinz stake. The move came as reports emerged that the consumer goods giant has been eyeing a spinoff of its grocery business. Two Berkshire executives resigned as directors from Kraft Heinz's board in May.
"The investment had been carried on Berkshire's books for more than its market value for some time," said Bill Stone, CIO of The Glenview Trust Company and a Berkshire shareholder. "Buffett has long acknowledged that he paid too much for Kraft Heinz, especially in light of the increased competition in the branded food category."
Buffett's cash hoard of $344.1 billion remained near a record high. Berkshire was a net seller of stocks for a 11th quarter in a row, dumping $4.5 billion in equities in the first six months of 2025.
The conglomerate also didn't repurchase any stock in the first half of 2025 and through July 21 even as shares suffered a sizable correction.
"While we believe Mr. Abel will build credibility with investors over time, we think near-term catalysts for BRK are increased investment activity, a potential large acquisition, and share repurchases," Kyle Sanders, analyst at Edward Jones, said in a note. "None of those happened this quarter, which we view as somewhat disappointing."
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