Observed Signal · Mar 2, 2026 · Earnings Report · Source: CNBC Investing · Impact: 4/5 · Sentiment: Negative
Berkshire Hathaway Shares Plunge Amid Disappointing Earnings Report
Berkshire Hathaway reported a 29% year-over-year decline in fourth-quarter operating earnings to $10.2 billion, driven mainly by weakness in its insurance operations where underwriting profits fell 54% to $1.56 billion. Class A shares dropped about 4.8% after the release. Greg Abel, who became CEO at the start of 2026, provided limited signs of immediate strategic change in his first shareholder communication, reiterating a preference for reinvestment and opportunistic buybacks rather than initiating a dividend. Berkshire ended 2025 with more than $370 billion in cash and Treasury holdings, prompting some investor surprise at the firm’s stated unwillingness to pay dividends. Analysts were mixed: KBW expressed disappointment over the lack of dividend, while UBS highlighted Berkshire’s defensive characteristics and outlined operational priorities at BNSF and Geico for 2026–2027.
Earnings report from a major conglomerate combined with a CEO transition and large cash balance affects investor expectations for capital allocation, dividends, and market sentiment.
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Key Takeaways & Evidence Grounding
- Berkshire Hathaway reported fourth-quarter operating earnings of $10.2 billion, down more than 29% from $14.56 billion a year earlier.
- Underwriting profits fell 54% to $1.56 billion from $3.41 billion in the year-earlier period.
- Class A shares fell approximately 4.8% following the results.
- Berkshire ended 2025 with more than $370 billion in cash and Treasury holdings.
- Greg Abel succeeded Warren Buffett as CEO at the start of 2026 and reiterated a capital allocation policy favoring reinvestment and opportunistic share repurchases over initiating a dividend.
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Berkshire earnings could show shares are cheap
Berkshire Hathaway’s second-quarter results, released August 8, 2026, are expected to reveal a sharp acceleration in share repurchases and stronger operating earnings, according to market analysts. UBS analyst Brian Meredith estimates Berkshire may have bought back roughly $8.5 billion of stock between April 15 and July 14, a major increase from $235 million in Q1. UBS also estimates the shares trade about an 8% discount to intrinsic value. The report will be the second under new CEO Greg Abel and follows robust results from peers in property-and-casualty insurance and railroads. UBS forecasts improved performance at BNSF and a strong quarter at Berkshire Hathaway Energy, while expecting narrower underwriting margins at Geico as it prioritizes growth. The quarter included closing the Taylor Morrison acquisition and a $10 billion investment in Alphabet to support AI development.
Analysts Tepid After Greg Abel's First Berkshire Meeting
Wall Street analysts praised Greg Abel’s command of Berkshire Hathaway’s diverse businesses at his first annual meeting as CEO, but many remained underwhelmed by the company’s cautious share-repurchase pace. Berkshire’s cash hoard is nearing $400 billion; first-quarter buybacks totaled about $235 million, including a previously disclosed $226 million purchase on March 4 after buybacks resumed in March 2026 (the first since 2024). Analysts said repurchases fell short of expectations given what they see as a discount to intrinsic value. While some analysts (e.g., KBW) noted margin pressures at BNSF Railway and commended Abel’s candid discussion of operations, others (e.g., CFRA) maintained conservative ratings. Artificial intelligence was a central theme: Abel described exploring AI-driven tools (including large language models) to improve operations at BNSF and highlighted rising data-center demand as a tailwind for Berkshire’s utilities.
Berkshire Sells Big as Buffett Steps Down
Berkshire Hathaway was a net seller of publicly traded stocks in Warren Buffett's final quarter as CEO. The company sold Apple shares in each of the last three quarters (and in seven of the past nine), reducing its Apple position by more than 75% since summer 2023, though Apple remained Berkshire's largest equity stake at $60.3 billion. Berkshire also cut its Amazon holding to $478 million after selling 7.7 million shares (a 77% reduction) and reduced its Bank of America position substantially. The firm increased its Chevron stake by 6.6% (adding about $1.2 billion) and boosted Chubb by 9.3% (about $910 million). Berkshire added a small New York Times position valued at $395 million (about a 3.1% stake). Separately, Berkshire utility PacifiCorp agreed to pay $575 million to resolve U.S. government wildfire claims and says it has settled nearly 90% of known claims for over $2.2 billion.
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