Berkshire Hathaway reported a significant 14% drop in operating profit for the first quarter of 2025, totaling $9.64 billion, down from $11.22 billion in the same period last year.

This decline was largely driven by an $860 million loss from insurance claims related to the Southern California wildfires and a notable decrease in the value of its investments.

The company also missed earnings expectations, with Class B shares earning $4.47, falling short of forecasts from UBS and FactSet.

While Berkshire's manufacturing, service, and retail businesses saw a slight profit decline of 1%, car dealerships reported improved vehicle sales, contrasting with challenges faced by the home furnishings sector.

On a more positive note, Berkshire Hathaway Energy experienced a remarkable 53% profit increase, driven by broad-based gains and improved performance in its HomeServices real estate unit.

Despite these challenges, Berkshire's Class A shares have risen 19% in 2025, while the S&P 500 has dropped 3.3%, indicating strong performance amid market turbulence.

Berkshire's cash reserves reached a record high of $347.7 billion, reflecting ongoing difficulties in finding attractive investment opportunities.

The company continued its trend of being a net seller of stocks, divesting $1.5 billion during the quarter, marking the tenth consecutive quarter of stock sales.

These earnings were disclosed just before Warren Buffett's annual shareholder meeting in Omaha, which drew thousands eager for insights from the 94-year-old CEO.

The quarterly report highlighted significant uncertainty regarding the impact of U.S. tariff policies on product costs and customer demand, adding to the economic challenges faced by the company.

Buffett emphasized the importance of focusing on operating earnings, which provide a clearer picture of the company's core business performance, excluding volatile investment results.

Looking ahead, Buffett announced plans to retire as CEO at the end of 2025, with Vice Chairman Greg Abel set to take over leadership of the company.