Berkshire Hathaway dips after lackluster Q2 results, $3.8 billion hit on Kraft Heinz stake
Both operating earnings and revenues fell year on year, and Berkshire didn’t buy back any stock for the fourth consecutive quarter.
Berkshire Hathaway, the company built up by investing icon Warren Buffett over the past six decades, reported mediocre to underwhelming Q2 results Saturday, punctuated by a big write-down of a company that it’s far and away the single largest shareholder in.
Shares are down nearly 1% in premarket trading.
The insurance, investment, and commercial conglomerate reported:
Operating earnings of $11.2 billion, down 3.8% from $11.6 billion reported in Q2 2024, driven by softness in its insurance business. However, that was still above the $10.74 billion average estimate from the two analysts polled by Bloomberg.
Total revenues of $92.515 billion, down 1.2% from $93.653 billion reported during the prior year period and well below the analysts’ average estimate for $95.135 billion.
The big headline from this release: Berkshire is (finally) marking the carrying value of its massive stake in ketchup maker Kraft Heinz to be in line with its market value, prompting a $3.8 billion hit to earnings. Berkshire owned 27.4% of Kraft Heinz as of June 30.
Edward Jones analyst Kyle Sanders suggested this write-down could be a prelude to the conglomerate reducing or completely exiting its position in the company going forward.
While seemingly every other US company is attempting to offer some insight on how changes to trade policy affect its outlook, Berkshire isn’t even bothering.
“Changes in macroeconomic conditions and geopolitical events, including changes in international trade policies and tariffs, may negatively affect our operating results and the values of our investments in equity securities and of our operating businesses,” per the earnings report. “We are currently unable to reliably predict the nature, timing or magnitude of the potential economic consequences of any such changes or the impacts on our Consolidated Financial Statements.”
Berkshire shares have badly lagged the market since the man known as the Oracle of Omaha announced in early May that he would cede the CEO job at Berkshire to top lieutenant Greg Abel on January 1. (Buffett will stay on as chairman.)
Berkshire is down roughly 12% since then, while the S&P 500 is up about 10%.
The Buffett-led company also refrained from any share repurchases for the fourth consecutive quarter, despite this bout of underperformance.
