American investor Warren Buffett’s Berkshire Hathaway announced on Saturday that its operating earnings for the second quarter fell by 3.79% compared to the same period last year.
This is the company’s first earnings report since Buffett, 94, revealed his plans to step down as CEO at the end of the year, with Greg Abel set to take over.
For the first six months of the year, operating revenues were reported at $20.8 billion, an 8.8% decrease from the previous year.
Net income for the second quarter saw a significant drop of 59%, totalling approximately $12.37 billion. The company’s insurance underwriting businesses also experienced a nearly 11% decline in pre-tax earnings for the quarter.
The report also noted that Berkshire’s cash pile has decreased slightly to $344 billion as of the end of the second quarter, down from $347 billion in early May.
Credit: Scott Morgan/Reuters
A major factor in the quarter’s results was a $3.8 billion hit on Berkshire’s stake in Kraft Heinz Co., a deal that Buffett has previously admitted was a mistake.
The company also warned that the current tariff policies of President Donald Trump are contributing to an uncertain economic outlook.
In its earnings report, Berkshire stated it is “unable to reliably predict the nature, timing, or magnitude of the potential economic consequences” of these changes.
This uncertainty was specifically cited as a reason for declining year-to-date revenue at clothing and toy brands such as Fruit of the Loom, Garan, and Jazwares.
In contrast, Berkshire’s energy and railroad businesses performed well, with BNSF Railway’s pre-tax earnings increasing by 11.5% and BHE’s net income climbing by 18%.
Shares of Berkshire (BRK.B) closed at $472.84 on Friday, marking a 4.82% increase since the beginning of the year.
