“Berkshire Hathaway Reports Profit Decline Due to Wildfire Losses and Investment Slump”
Warren Buffett’s Berkshire Hathaway posted a sharp decline in profits for the first quarter of 2025, reporting net earnings of $4.6 billion, or $3,200 per Class A share, compared to $12.7 billion, or $8,825 per share, during the same period last year. The dramatic drop—just over one-third of the previous year’s earnings—was attributed to a steep decline in the value of Berkshire’s investments and significant insurance losses related to devastating wildfires in Southern California. The company revealed $860 million in insurance losses tied to policies written by Geico and other subsidiaries, heavily impacting the bottom line.
Despite the disappointing financial figures, thousands of shareholders flocked to Omaha, Nebraska, for Berkshire Hathaway’s highly anticipated annual meeting. The event remains a major draw in the business and investing world, largely due to the legendary status of CEO Warren Buffett, now 94 years old. His much-anticipated Q&A session continues to be the centerpiece of the weekend, providing insights that investors worldwide eagerly wait for. Many believe this year’s meeting could be one of Buffett’s last in-person appearances, adding emotional weight for attendees like Haibo Liu, a shareholder who traveled from China and camped outside the venue overnight to secure a front-row experience. “He has helped me a lot,” Liu said, expressing gratitude for Buffett’s guidance over the years.
On an operating basis—an earnings metric Buffett has long championed as more reflective of business performance—Berkshire still saw a decline. Operating earnings fell 14% to $9.6 billion, or $6,703.41 per Class A share, down from $11.2 billion, or $7,796.47 per share, during the same quarter in 2024. This figure also missed analyst expectations, with FactSet Research projecting $7,076.90 per Class A share. The volatility in reported net earnings is largely due to accounting rules that require companies to reflect unrealized gains or losses in their stock portfolios, even if the underlying stocks have not been sold. Buffett has repeatedly cautioned investors not to focus too heavily on these figures, as they can distort the real operating strength of the business.
One of the most talked-about topics at this year’s meeting was Berkshire’s mounting cash reserves, which have now reached a record $347.7 billion, up from $334.2 billion at the end of 2024. This growing war chest signals that Buffett and his investing team may be finding fewer opportunities that meet their strict valuation criteria. Market watchers are curious whether Berkshire made any significant purchases in April, particularly following a sharp market dip spurred by former President Donald Trump’s recent tariff announcement. However, the quarterly report did not disclose any major new acquisitions during that time.
Berkshire Hathaway’s vast and diversified portfolio includes major holdings in companies like Geico, BNSF Railway, large-scale utilities, and well-known consumer brands such as See’s Candies. It also maintains one of the largest and most closely monitored stock portfolios in the world. While the recent financial results may have fallen short of expectations, investor interest in Buffett’s strategy and leadership remains strong.
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