Berkshire Hathaway's operating earnings dropped 30% in Q4 2025, insurance profits fell 54%, and the company bought back exactly zero shares despite sitting on $373 billion in cash. If you're wondering what Greg Abel's first earnings report as CEO is really saying, here's the translation: we're not finding anything worth buying at these prices.
Let's cut through the numbers. Operating earnings came in at $10.2 billion for Q4, down from $14.56 billion a year earlier. Insurance underwriting profits—historically a cash machine for Berkshire—dropped 54% to $1.56 billion. Insurance investment income slid nearly 25% to $3.1 billion. For the full year, operating earnings totaled $44.49 billion, down from $47.44 billion in 2024.
These aren't disaster numbers. They're a signal.
Warren Buffett stepped down as CEO last May but remains chairman. Abel took over at the start of 2026, and his first annual letter to shareholders reads like a masterclass in capital discipline. No buybacks. A cash hoard that decreased slightly from a record $381.6 billion in Q3 to $373.3 billion—but still, that's more than the GDP of Finland sitting in Treasury bills earning 4-5%.
Wall Street's reaction on Monday will probably be negative. Earnings down, no buybacks, insurance weakness. But here's what they're missing: this is exactly what value investing looks like when valuations are stretched.
Buffett and now Abel have always said they'll only buy back stock when it's trading below intrinsic value. The fact that they're sitting on their hands tells you everything you need to know about what they think of current market prices. Berkshire shares rose 10% in 2025, lagging the S&P 500's 16.4% advance. The market is expensive. They know it. They're getting paid to wait.
One Reddit user asked, "I wonder how the market will react on Monday?" Fair question. Short-term, probably down. But if you understand what Berkshire actually is—a compounding machine built on discipline, not momentum—this report is what you want to see.
