Berkshire Q2 2025: Buffett Exit, $3.76B Kraft Loss, Profit Dip

The End of an Era and a Cautionary Quarter

In the second quarter of 2025, Berkshire Hathaway began what may be its most significant transition since its inception. With Warren Buffett officially announcing his plan to step down as CEO by the end of the year, the legendary conglomerate finds itself at a financial and leadership crossroads.

While the company remains a fortress of capital, Q2 brought a slew of red flags: shrinking profits, an eye-catching Kraft Heinz impairment, and a quieter approach to equities. This quarter wasn’t about bold moves, it was about bracing for the next chapter.

A Deep Dive Into Q2 2025: Numbers Behind the Narrative

$3.76 Billion Kraft Heinz Write-Down

Berkshire Hathaway reported a $3.76 billion after-tax impairment on its long-held Kraft Heinz stake. The company cited this as “other-than-temporary,” signaling a more structural rather than cyclical valuation decline. Buffett’s team owns about 27.4% of Kraft Heinz, and the write-down underscores a rare public misstep for the Oracle of Omaha.

Operating Earnings Fall to $11.16 Billion

The company’s operating earnings slipped 4% year-over-year, landing at $11.16 billion. Contributing factors include weaker insurance underwriting results and foreign exchange losses. It was a reminder that even the strongest balance sheets aren't immune to external macro pressures.

Net Income Plummets 59%

Despite Berkshire’s diversified portfolio, net income dropped sharply to $12.37 billion, down from $30.3 billion in Q2 2024. This decline was largely driven by the Kraft Heinz impairment and investment-related volatility.

No Stock Buybacks, Again

Berkshire Hathaway stayed on the sidelines during the quarter, opting for zero share repurchases. This marks the 11th consecutive quarter as a net seller of equities—highlighting Buffett's ultra-cautious capital deployment in the face of high valuations and global uncertainty.

Still Sitting on a Mountain of Cash

Despite the conservative stance, Berkshire ended the quarter with roughly $344.1 billion in cash and short-term Treasury investments. Though slightly down from Q1's $347.7 billion, this cash pile remains near historic highs. It gives incoming CEO Greg Abel a sizable war chest for future acquisitions or continued patience.

Greg Abel’s Transition: From Behind the Scenes to Center Stage

Buffett confirmed at the 2025 shareholder meeting that he’ll step down as CEO by year-end 2025, officially naming Greg Abel, Vice Chairman of Non-Insurance Operations, as his successor. Abel will lead operational decisions, while Buffett is expected to retain the chairman role, ensuring some continuity.

This transition reflects Buffett's succession plan long in the making, but the timing paired with a rocky quarter puts the spotlight firmly on Abel’s leadership ability from day one.

What This Means for Investors

With a falling bottom line and no aggressive moves in the market, Berkshire's strategy clearly signals caution. The company is battening down the hatches while preparing for a post-Buffett world. However, with over $344 billion in liquidity and a leadership bench handpicked by Buffett himself, Berkshire is far from vulnerable.

Key Investor Takeaways:

• Expect conservative positioning for the near future

• No signs of big acquisitions or stock buybacks in Q2

• Greg Abel’s decisions will define 2026 and beyond

Berkshire Hathaway’s post-Buffett era is already testing investor confidence, with its latest earnings miss and cautious capital deployment raising more questions than answers. While the company’s fundamentals remain strong, the lack of aggressive investment moves or share buybacks leaves the stock vulnerable to market sentiment.

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