Why did Berkshire's reported net earnings drop so much compared with 2024?

The 2024 net earnings figure was boosted by $41.6 billion of investment gains, including large realized gains on sales of investments ($79.6 billion pre-tax-equivalent realized gains per the release's after-tax disclosure of $79.6 billion for the full year). In 2025, investment gains were $30.7 billion, and the company also took $8.3 billion of impairments on Kraft Heinz and Occidental. Because investment gains swing widely from period to period, operating earnings is a more stable comparison of underlying performance.

What does 'operating earnings' measure, and why does Berkshire emphasize it?

Operating earnings is net earnings excluding investment gains or losses, goodwill and intangible asset impairments, and other-than-temporary impairments of equity method investments. Berkshire emphasizes it because GAAP requires unrealized changes in equity security values to flow through earnings, which can make net earnings volatile and unrelated to business performance.

Which business segments drove the decline in operating earnings?

The largest declines were in insurance underwriting (down about $1.8 billion for the full year), insurance investment income (down about $1.2 billion), and the 'Other' category (down about $1.3 billion, which includes parent-company investment income and foreign currency effects on non-U.S. dollar debt). Offsetting gains came from BNSF, Berkshire Hathaway Energy, and manufacturing, service and retailing.

Should investors rely on this press release for an investment decision?

No, not on its own. Berkshire explicitly states that the press release's limited information is not adequate for making an informed investment judgment and directs readers to the 2025 Annual Report for complete details, including capital allocation, cash holdings, and segment discussion.

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

01—Abstract

Summary

Summary of the 8-K filed March 2, 2026. Cited figures are marked; the original filing is the authoritative source.

Berkshire Hathaway's February 28, 2026 earnings release (furnished under Form 8-K on March 2, 2026) reports fourth-quarter and full-year 2025 results.

Net earnings attributable to Berkshire shareholders fell to $19.2 billion^a in Q4 2025 (from $19.7 billion a year earlier) and to $67.0 billion for full-year 2025 (from $89.0 billion in 2024). However, these headline figures are heavily distorted by investment gains and losses, which the company explicitly warns are not meaningful for assessing quarterly business performance. Investment gains were $13.5 billion in Q4 and $30.7 billion for the full year, and the release also records other-than-temporary impairments of $4.5 billion in Q4 and $8.3 billion for the year on Kraft Heinz and Occidental holdings.

The better gauge of underlying business performance is operating earnings, which declined to $10.2 billion^b in Q4 2025 from $14.5 billion in Q4 2024, and to $44.5 billion for the full year from $47.4 billion. The decline was driven primarily by lower insurance underwriting earnings ($7.3 billion for 2025 versus $9.0 billion in 2024) and lower insurance investment income ($12.5 billion versus $13.7 billion). Partial offsets came from higher BNSF ($5.5 billion versus $5.0 billion), Berkshire Hathaway Energy ($4.0 billion versus $3.7 billion), and manufacturing, service and retailing ($13.6 billion versus $13.1 billion) earnings.

Insurance float reached approximately $176 billion^c at year-end 2025, up $5 billion for the year. Berkshire's release itself urges investors to read the 2025 Annual Report rather than rely on the limited data in the press release, which it states is not adequate for making an informed investment judgment. Investors should therefore treat this 8-K as a summary and direct their analysis to the full annual report for detail on capital allocation, cash position, and segment dynamics.

02—Key points

Key Highlights

Net earnings attributable to Berkshire shareholders were $19.2 billion in Q4 2025 (vs. $19.7 billion in Q4 2024) and $67.0 billion for full-year 2025 (vs. $89.0 billion in 2024).
Operating earnings, the company's preferred underlying measure, were $10.2 billion in Q4 2025 (vs. $14.5 billion) and $44.5 billion for full-year 2025 (vs. $47.4 billion), a decline of roughly 6%.
Investment gains were $30.7 billion for full-year 2025, offset by $8.3 billion of other-than-temporary impairments on Kraft Heinz and Occidental investments, which were recorded in 2025 and not in 2024.
Insurance underwriting earnings fell to $7.3 billion for 2025 from $9.0 billion in 2024, while insurance investment income declined to $12.5 billion from $13.7 billion.
Non-insurance segments were mixed: BNSF rose to $5.5 billion, BHE to $4.0 billion, and manufacturing, service and retailing to $13.6 billion, while 'Other' fell sharply to $1.6 billion from $2.9 billion.
Insurance float rose about $5 billion to approximately $176 billion at December 31, 2025.
Per Class A equivalent share net earnings were $46,563 for 2025 versus $61,900 for 2024, and the company cautions that per-share figures for any single quarter can be misleading.

03—Questions

Frequently Asked Questions

Why did Berkshire's reported net earnings drop so much compared with 2024?
The 2024 net earnings figure was boosted by $41.6 billion of investment gains, including large realized gains on sales of investments ($79.6 billion pre-tax-equivalent realized gains per the release's after-tax disclosure of $79.6 billion for the full year). In 2025, investment gains were $30.7 billion, and the company also took $8.3 billion of impairments on Kraft Heinz and Occidental. Because investment gains swing widely from period to period, operating earnings is a more stable comparison of underlying performance.
What does 'operating earnings' measure, and why does Berkshire emphasize it?
Operating earnings is net earnings excluding investment gains or losses, goodwill and intangible asset impairments, and other-than-temporary impairments of equity method investments. Berkshire emphasizes it because GAAP requires unrealized changes in equity security values to flow through earnings, which can make net earnings volatile and unrelated to business performance.
Which business segments drove the decline in operating earnings?
The largest declines were in insurance underwriting (down about $1.8 billion for the full year), insurance investment income (down about $1.2 billion), and the 'Other' category (down about $1.3 billion, which includes parent-company investment income and foreign currency effects on non-U.S. dollar debt). Offsetting gains came from BNSF, Berkshire Hathaway Energy, and manufacturing, service and retailing.
Should investors rely on this press release for an investment decision?
No, not on its own. Berkshire explicitly states that the press release's limited information is not adequate for making an informed investment judgment and directs readers to the 2025 Annual Report for complete details, including capital allocation, cash holdings, and segment discussion.

04—Continue

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