BERKSHIRE HATHAWAY INC.'s Net Earnings Plunge 59.35% Driven by Investment Losses

BERKSHIRE HATHAWAY INC. reported net earnings attributable to shareholders of $12.37 billion for Q2 2025, a significant decrease of 59.35% compared to $30.348 billion in Q2 2024. Revenues for the quarter were $92.515 billion, down 1.22% from $93.653 billion in the same period last year. For the first six months of 2025, net earnings attributable to shareholders were $16.973 billion, a decrease of 60.59% from $43.050 billion in the first six months of 2024, while revenues saw a slight decline of 0.70% to $182.240 billion from $183.522 billion.

Investment Performance Impact

The notable decline in net earnings was primarily driven by a substantial decrease in investment gains. For Q2 2025, investment gains were $6.364 billion, a sharp decline from $23.857 billion in Q2 2024. For the first six months of 2025, the company recorded investment losses of $71 million, a significant reversal from gains of $25.733 billion in the corresponding period of 2024. This volatility is influenced by changes in market prices of equity securities and foreign currency exchange rates, which the company states are generally meaningless in understanding periodic results.

Underwriting Performance and Key Drivers

Insurance underwriting after-tax earnings decreased $271 million in the second quarter and $1.5 billion in the first six months of 2025 compared to 2024. Underwriting results in the first six months of 2025 included after-tax losses of approximately $850 million from the Southern California wildfires, which occurred in the first quarter. GEICO's underwriting earnings were $1.821 billion in Q2 2025, a slight increase from $1.786 billion in Q2 2024, reflecting higher earned premiums and lower claims frequencies, despite increases in average claims severities.

Segmental Contributions and Outlook

After-tax earnings of BNSF increased 19.5% in the second quarter and 13.1% in the first six months of 2025, primarily due to improved operating efficiencies, productivity, and lower effective income tax rates. After-tax earnings of Berkshire Hathaway Energy (BHE) increased 7.2% in the second quarter and 31.1% in the first six months of 2025, reflecting higher earnings from U.S. utilities and reduced losses from real estate brokerage businesses, partly offset by lower earnings from natural gas pipelines. However, the company faces considerable uncertainty regarding macroeconomic and geopolitical conflicts, which could negatively affect its operating results and investments. The recently enacted One Big Beautiful Bill Act (OBBBA) in July 2025 could also impact BHE's financial results and capital expenditures related to renewable energy, storage, and technology-neutral projects.

Manufacturing, service, and retailing businesses experienced mixed results. Pre-tax earnings for the manufacturing group increased 3.8% in Q2 2025 but decreased 1.3% for the first six months. The service and retailing segments saw pre-tax earnings increase by 6.9% in Q2 2025 and 9.7% for the first six months, driven by growth in aviation services and other service businesses. However, the retail segment, particularly Pilot Travel Centers, faced revenue declines due to lower fuel sales volumes and prices. The company reiterates its commitment to maintaining significant liquidity and a strong capital base, with no share repurchases in the first six months of 2025 to preserve financial strength.