Why did Berkshire's net earnings fall so sharply in Q2 2025?

Net earnings fell to $12.37 billion from $30.35 billion mainly because investment gains dropped to $4.97 billion from $18.75 billion, and the quarter included a $3.76 billion impairment on Kraft Heinz. These items are largely driven by changes in the market value of equity holdings and are not a reliable measure of underlying business performance.

How did Berkshire's core operating businesses perform?

Operating earnings were $11.16 billion versus $11.60 billion, a modest decline. Rail (BNSF), energy (Berkshire Hathaway Energy) and manufacturing, service and retailing all improved, while insurance underwriting and the 'Other' category weakened. The 'Other' decline was largely due to currency losses on non-U.S. dollar debt.

What does the Kraft Heinz impairment mean for investors?

The $3.76 billion other-than-temporary impairment reflects a write-down of Berkshire's investment in Kraft Heinz, recognized because the decline in value was judged not temporary. It is a non-cash charge to earnings in the quarter and is excluded from operating earnings, but it reduces the carrying value of that investment.

Why does Berkshire emphasize operating earnings over net earnings?

Under GAAP, changes in unrealized gains and losses on equity securities flow through net earnings, which can cause large swings unrelated to business operations. Operating earnings exclude investment gains and certain impairments, giving a clearer view of ongoing performance, though management still urges investors to read the full 10-Q before drawing conclusions.

Is the insurance float growing, and why does it matter?

Insurance float rose about $3 billion to roughly $174 billion since year-end 2024. Float is the net liabilities Berkshire holds from insurance contracts, and it provides investable capital at low or no cost, so growth in float supports the company's investment income capacity.

BRK-B/BRK-A 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 4, 2025. Cited figures are marked; the original filing is the authoritative source.

Berkshire Hathaway's second-quarter 2025 earnings release, filed August 2, 2025 and furnished under Item 2.02, shows net earnings attributable to Berkshire shareholders of $12.37 billion^a, down from $30.35 billion a year earlier.

The decline is driven mainly by investment results: investment gains were $4.97 billion^b versus $18.75 billion in Q2 2024, and the quarter also included a $3.76 billion other-than-temporary impairment of the Kraft Heinz investment. The company itself cautions that investment gains or losses in any single quarter are usually not meaningful for assessing business performance, so investors should focus on operating earnings. Operating earnings, which exclude investment gains and impairments, were $11.16 billion in Q2 2025 versus $11.60 billion in Q2 2024, a decline of about 4%.

Insurance underwriting fell to $1.99 billion^c from $2.26 billion, while insurance investment income rose modestly to $3.37 billion. BNSF (rail) grew to $1.47 billion from $1.23 billion, and Berkshire Hathaway Energy rose to $702 million from $655 million. Manufacturing, service and retailing increased to $3.60 billion from $3.38 billion.

The steepest drop came in 'Other,' which fell to $32 million^d from $753 million, largely because of foreign currency exchange losses of $877 million on non-U.S. dollar debt, compared with a $446 million gain in the prior-year quarter. For the first six months, net earnings were $16.97 billion versus $43.05 billion, and operating earnings were $20.80 billion versus $22.82 billion.

Insurance float reached approximately $174 billion at June 30, 2025, up $3 billion since year-end 2024. The release points readers to the Form 10-Q for complete information and expressly states that the press release alone is not adequate for making an informed investment decision.

02—Key points

Key Highlights

Q2 2025 net earnings attributable to Berkshire shareholders were $12.37 billion, down about 59% from $30.35 billion in Q2 2024, mainly due to lower investment gains.
Q2 2025 investment gains were $4.97 billion versus $18.75 billion a year earlier, and included a $3.76 billion other-than-temporary impairment of the Kraft Heinz investment.
Q2 2025 operating earnings were $11.16 billion, down about 4% from $11.60 billion, reflecting weaker insurance underwriting and 'Other' results.
Insurance underwriting earnings fell to $1.99 billion from $2.26 billion, while insurance investment income rose to $3.37 billion from $3.32 billion.
BNSF operating earnings rose about 19% to $1.47 billion, and Berkshire Hathaway Energy rose about 7% to $702 million.
'Other' operating earnings dropped to $32 million from $753 million, driven by an $877 million foreign currency loss on non-U.S. dollar debt versus a $446 million gain a year earlier.
Insurance float was approximately $174 billion at June 30, 2025, up $3 billion from year-end 2024.

03—Questions

Frequently Asked Questions

Why did Berkshire's net earnings fall so sharply in Q2 2025?
Net earnings fell to $12.37 billion from $30.35 billion mainly because investment gains dropped to $4.97 billion from $18.75 billion, and the quarter included a $3.76 billion impairment on Kraft Heinz. These items are largely driven by changes in the market value of equity holdings and are not a reliable measure of underlying business performance.
How did Berkshire's core operating businesses perform?
Operating earnings were $11.16 billion versus $11.60 billion, a modest decline. Rail (BNSF), energy (Berkshire Hathaway Energy) and manufacturing, service and retailing all improved, while insurance underwriting and the 'Other' category weakened. The 'Other' decline was largely due to currency losses on non-U.S. dollar debt.
What does the Kraft Heinz impairment mean for investors?
The $3.76 billion other-than-temporary impairment reflects a write-down of Berkshire's investment in Kraft Heinz, recognized because the decline in value was judged not temporary. It is a non-cash charge to earnings in the quarter and is excluded from operating earnings, but it reduces the carrying value of that investment.
Why does Berkshire emphasize operating earnings over net earnings?
Under GAAP, changes in unrealized gains and losses on equity securities flow through net earnings, which can cause large swings unrelated to business operations. Operating earnings exclude investment gains and certain impairments, giving a clearer view of ongoing performance, though management still urges investors to read the full 10-Q before drawing conclusions.
Is the insurance float growing, and why does it matter?
Insurance float rose about $3 billion to roughly $174 billion since year-end 2024. Float is the net liabilities Berkshire holds from insurance contracts, and it provides investable capital at low or no cost, so growth in float supports the company's investment income capacity.

04—Continue

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