Warren Buffett's Berkshire Hathaway reported a 4% operating profit decline on Saturday, along with a big write-down of its investment in Kraft Heinz. BRKB stock fell Monday to a six-month low.
After-tax operating profit fell 4% in the second quarter vs. a year earlier to $11.2 billion, or $7,760 per class A share. That topped the FactSet estimate of about $7,500. The decline reflected $877 million in foreign exchange losses due to Berkshire's U.S.-dollar debt. Without that, the conglomerate's operating profit would have risen 8%.
No Berkshire Buyback
Berkshire didn't buy back any of its stock in the second quarter or in the first three weeks of July. It hasn't bought any of its shares since Q2 2024. There was speculation that the company might resume buyback. BRKA and BRKB stock prices have fallen more the 10% since Warren Buffett said at Berkshire's annual meeting in May that he would step down as CEO at year-end, but remain chairman. His chosen successor, Greg Abel, will step in as CEO.
Berkshire Stock Action
Berkshire's B-class shares declined 2.9% to 459.28, undercut recent lows to hit their worst levels since early February. BRKB stock fell 2.3% to 472.84 last week, hitting resistance at the 200-day line. Shares hit a record $542.07 on May 3, just before the annual meeting.
Berkshire sold a net $3 billion in equities, continuing a long stretch of selling stock holdings.
The company's cash hoard fell about $4 billion to $344 billion, but rose adjusted for a liability tied to Treasury bill purchases at the end of Q1.
Insurance underwriting profits fell vs. a very strong 2024, while insurance investment income rose. Profits climbed 15% at its Berkshire's railroad unit, Burlington Northern Santa Fe. Berkshire's utility business saw a 7% gain in operating profit.
Berkshire Hathaway wrote down its equity investment in Kraft Heinz by $3.8 billion, to $8.4 billion, more in line with the market value of its 27% stake. Kraft is mulling strategic options for its food businesses.
Berkshire noted in its release that big macroeconomic and geopolitical factors could affect its business.
"The pace of changes in these events, including tensions from developing international trade policies and tariffs, accelerated through the first six months of 2025."
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