Warren Buffett's Berkshire Hathaway reports 3.8% decline in profits

Aug. 2 (UPI) — Berkshire Hathaway on Saturday reported a 3.79% decline in second-quarter earnings as CEO Warren Buffett‘s company warned about troubling times because of President Donald Trump‘s tariffs on imported goods.

Buffett, who has been involved with the company for 60 years, owns about 15.1% of its economic interest and 31.2% of its voting interest as its largest shareholder.

The public company reported an operating profit of $11.16 billion, with a lower number from a decline in its assets, which include insurance underwriting for Geico. The first-half decline was 8.8% at $20.8 billion.

Net income in the second quarter dropped to $12.37 billion, which is a 59% slump from the second quarter last year.

Trump in April imposed a baseline tariff of 10% on most trading partners with high duties in place or coming on Friday.

“Considerable uncertainty remains as to the ultimate outcome of these events,” the company said in its filing. “We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand for our products and services. It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses, as well as on our investments in equity securities, which could significantly affect our future results.”

The company said its financials already were impacted.

“The pace of changes in these events, including tensions from developing international trade policies and tariffs, accelerated through the first six months of 2025,” Berkshire said.

Pre-tax underwriting losses before foreign currency effects were $276 million in the first six months this year, compared with $299 million in 2024, the company reported.

Berkshire encountered a $1.1 billion payout from the Southern California wildfires in January. There were no significant catastrophic events in the first six months of 2024.

But higher profits did roll in for the company’s railroad, manufacturing, service and retail holdings, CNBC reported. Also, its energy company, Berkshire Hathaway Energy, had an 18% rise in net income.

The company reported revenue of $182.24 billion for the first six months compared with $183.52 the previous year. Second-quarter revenue was 92.15 billion, with 93.7 billion in 2024.

Berkshire Hathaway wrote down a loss of $3.8 billion from a stake in Kraft Heinz and is considering a spinoff for the food giant, of which it owns owns 27.4% in stock.

Berkshire Hathaway has $344.09 billion in cash, equivalents and short-term securities.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change,” Buffett wrote in his annual 15-page letter in February.

The company did not re-purchase any stock during the first half of this year.

“Berkshire’s common stock repurchase program permits Berkshire to repurchase its shares any time that Warren Buffett … believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined,” the company said in the filing.

Berkshire Hathaway filed its first earnings report since the 94-year-old Buffett announced he will depart as CEO at the end of the year, but will remain as chairman of the board. Greg Abel, who is the company’s vice president of non-insurance operations, will become the new CEO.

Buffett is the ninth richest person in the world with a net worth $141.7 billion through Saturday, according to Forbes, and is known as the Oracle of Omaha, which refers to the Nebraska city where Berkshire is headquartered and he has lived his entire life.

Berkshire Hathaway traces its roots to 1839 as Valley Falls Company, a textile manufacturer in New England, before mergers with Hathaway Manufacturing Company in 1888 and Berkshire Fine Spinning Associates in 1929.

The company was “mired in a terrible business,” according to Buffett, and he purchased his first shares of Berkshire in December 1962.

The company’s market capitalization is now $1.01 trillion.

Shares ended trading Friday at $472.84. This year, the all-time high has been $539.80 on May 4, while the 2025 low was $442.66 on Jan. 10. The company began trading in 1996 at $22.20. Class A shares have never undergone a stock split.

In a message, Buffett wrote: “You probably know that I don’t make stock recommendations. However, I have two thoughts regarding your personal expenditures that can save you real money. I’m suggesting that you call on the services of two subsidiaries of Berkshire: GEICO and Borsheim’s.”

He noted savings on Geico for auto insurance and Borsheim fine jewelry, watches and giftware “almost certainly will cost you less.”