Berkshire Hathaway is currently undergoing a significant leadership transition, with Gregory E. Abel stepping into the chief executive position. He has articulated a clear commitment to upholding the conglomerate's enduring principles of corporate culture and disciplined capital management. This change in leadership coincides with a notable decline in the company's financial performance, as reflected in its recent earnings reports.
The financial disclosures reveal a challenging period for the company. Operating earnings for the fourth quarter experienced a substantial decrease, falling to $10.2 billion from $14.56 billion in the same period of the previous year, representing a 29.8% reduction. The full fiscal year 2025 also saw a decline in operating earnings, totaling $44.49 billion compared to $47.44 billion in the prior year. Furthermore, the company's cash reserves slightly contracted, moving from $381.6 billion to $373.3 billion, despite the absence of share repurchases. Amidst these financial shifts, Berkshire Hathaway maintains a concentrated equity portfolio, with significant stakes in five major companies, and an additional holding in Occidental common stock, including approximately $8.5 billion in Occidental preferred stock as of December 31, 2025.
A strategic focus for Berkshire Hathaway continues to be its substantial investments in five prominent Japanese trading companies, which contribute significantly through dividends and offer extensive global reach. These holdings, valued at $194 billion at year-end, constitute nearly two-thirds of the total equity securities portfolio and provide a combined dividend yield of 10% on their original cost basis. This calculated approach in Japan, coupled with a commitment to its robust insurance sector as a core financial driver, underscores Abel's strategy. He emphasizes the importance of disciplined underwriting, long-term strategic thinking, and unwavering integrity, reinforcing the foundational values that have defined Berkshire Hathaway's success.
As Berkshire Hathaway embraces this new chapter under Gregory E. Abel's leadership, the company stands at a pivotal point, demonstrating resilience and forward-thinking strategy in a dynamic global economic environment. The commitment to core values, strategic international investments, and prudent financial management not only honors its rich legacy but also lays a strong foundation for future growth and sustained success.