Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) is facing the heat from global trade tensions and tariff headwinds, as weak insurance and investment hits dragged down its second-quarter performance reported on Saturday morning.
The Omaha-based company’s operating earnings dipped 3.8% to $11.16 billion in the latest quarter. Sluggish insurance underwriting and a bruising $3.8 billion blow from its stake at The Kraft Heinz Company (NASDAQ:KHC) weighed on profits.
According to the Berkshire report, the decline was largely driven by a 12% plunge in insurance-underwriting profit, which came in at $1.99 billion for the second quarter, down from $2.26 billion a year prior.
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The quarterly report marks the first earnings announcement since 94-year-old Warren Buffett announced he will step down as CEO at the end of 2025.
Greg Abel, currently vice-chairman overseeing non-insurance operations, is slated to succeed him as CEO. Buffett will continue to serve as chairman of Berkshire’s board.
“The pace of changes in these events, including tensions from developing international trade policies and tariffs, accelerated through the first six months of 2025. Considerable uncertainty remains as to the ultimate outcome of these events,” Berkshire said in its earnings report.
As of June 30, 2025, Berkshire Hathaway’s equity portfolio remained heavily concentrated, with five companies:
- American Express Company (NYSE:AXP)
- Apple Inc. (NASDAQ:AAPL)
- Bank of America Corporation (NYSE:BAC)
- Coca-Cola Company (NYSE:KO)
- Chevron Corporation (NYSE:CVX)
These five companies accounted for 67% of total equity holdings at the end of the second quarter, lower than 71% as of December 2024.
Berkshire said it and its subsidiaries hold investments that are accounted for pursuant to the equity method.
As of the end of the second quarter, the firm owned 27.4% of the outstanding The Kraft Heinz Company common stock and 28.1% of the outstanding Occidental Petroleum Corporation (NYSE:OXY) common stock.
On May 20, 2025, Kraft Heinz announced it was exploring potential strategic transactions to boost shareholder value but gave no guarantee of any outcome.
Considering this uncertainty and broader economic conditions, Berkshire determined that the decline in Kraft Heinz’s stock value was “other-than-temporary”.
Warren Buffett’s cash reserves stood at $344.1 billion at the end of June 2025, just below the record $347 billion reported at the end of March, per a CNBC report.
“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,” the company said.
Berkshire Hathaway continued its trend as a net seller of stocks for the 11th consecutive quarter, offloading $4.5 billion worth of equities during the first half of the year.
“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.” Berkshire added.
As Buffett prepares to pass the torch, Berkshire faces a turbulent road ahead--navigating market headwinds, investment volatility, and global economic uncertainty that could reshape its future playbook.
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Image: Shutterstock/Rokas Tenys
