In his first annual letter to shareholders, new Berkshire Hathaway (BRK.B) CEO Greg Abel stressed he will maintain the conglomerate’s ‘fortress-like’ balance sheet. He also pledged to uphold the values of his predecessor Warren Buffett.
| Share price: $505 | HQ: Omaha, Nebraska |
| Market cap: $1.09trn | Yield: n/a |
Shares in Berkshire Hathaway have underperformed the S&P500 since Buffett announced he was stepping down last May.
Signalling it will be business as usual at Berkshire Hathaway, Abel’s comments reassured investors in the Omaha-based colossus.
Dry powder
Abel insisted he won’t rush to deploy Berkshire’s near-record $373.3 billion cash pile, which gives the company plenty of ‘dry powder’. In addition, Abel has no plans to start paying dividends, which Buffett opposed.
‘I recognize how you want us to succeed together, and to do so in the right way,’ Abel wrote in the letter.
‘My role is to ensure our liquidity levels and capital deployment remain intentional and deliberate.’
Paying homage
Abel paid homage to Buffett, who remains chairman and continues to work from Berkshire’s offices, describing him as a ‘remarkable’ CEO.
‘Warren Buffett is arguably the greatest investor of all time, with generations benefiting from his investment acumen,’ wrote Abel.
He added: ‘He has also been a remarkable CEO, executing his vision of building a great insurance business since the acquisition of National Indemnity in 1967, and deploying the float to make successful investments across major sectors of the economy, concentrating in the US.’
Profits under pressure
Berkshire Hathway suffered a 30% decline in Q4 operating earnings to $10.2 billion as income from insurance operations such as Geico declined.
Overall earnings, which include gains or losses from its stock market investments, fell from $19.7 billion to $19.2 billion.
However, the numbers were impacted by a $4.5 billion impairment from Berkshire’s stakes in Kraft Heinz (KHC) and Occidental Petroleum (OXY).
FY25 operating profit fell 6% to $44.49 billion amid a decline in insurance underwriting earnings.
Abel vowed to invest in durable businesses that Berkshire understands. And to ‘avoid businesses that undermine the fabric of society or could jeopardize Berkshire’s reputation’.
He acknowledged pressures on the company’s PacifiCorp utility from litigation over Oregon and California wildfires and was critical of Berkshire businesses that could perform better.
He bemoaned the performance gap between freight railroad BNSF and industry-leading rivals as ‘too wide’. Abel also called out ‘self-inflicted’ difficulties at flooring firm Shaw that impacted quality and service.
‘Each business is accountable to its CEO, who is expected to pursue operational excellence relentlessly and close performance gaps,’ insisted Abel, in a reference to Berkshire’s non-insurance businesses.
Although Berkshire Hathaway shares lagged the S&P500 in 2025, Buffett’s stewardship of Berkshire Hathaway created vast wealth for shareholders.
Berkshire Hathaway has seen compounded annual gains of 19.7% since 1965. That’s nearly double the S&P500’s compounded increases over the same period.
Read the shareholder letter: https://www.berkshirehathaway.com/letters/gealetters.html
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