Berkshire’s Profit Plunges 30% to $10.2B as Cash Pile Tops $370B
Berkshire Hathaway’s fourth-quarter operating profit plunged 30% to $10.2 billion, prompting a 5.3% stock drop and a 5% cut to its 2026 earnings forecast. CEO Greg Abel defended the $370 billion cash and Treasury pile as “dry powder,” reiterating no buybacks or dividends until shares trade below intrinsic value.
1. Q4 Performance and Forecast Adjustment
Berkshire Hathaway’s fourth-quarter operating profit declined 30% to $10.2 billion, driven by underperformance at BNSF, energy, manufacturing and retail units. Analyst earnings forecasts for 2026 were reduced by 5%, and both Class A and B shares dropped about 5.3% following the results.
2. Cash Pile and Buyback Discipline
Greg Abel stressed that the company’s $370 billion cash and U.S. Treasury holdings serve as “dry powder” for strategic investments, not as a retreat from deployment. Berkshire has paused stock buybacks for 18 months and will only resume them, as well as consider dividends, when shares trade below a conservatively determined intrinsic value.
3. Insurance Operations and Underwriting
Insurance operations saw mixed trends as GEICO’s broad rate increases restored underwriting margins but led to lower customer retention. The insurance float rose to $176 billion and the combined ratio improved to 87.1%, though competitors’ rate reductions may extend pricing pressure into 2026.