Berkshire Hathaway's shares fall after $3.8 billion write-down, operating profit weakness

By Pritam Biswas

(Reuters) -Class A shares of Warren Buffett's Berkshire Hathaway fell more than 3% in afternoon trading on Monday, as investors fretted over a $3.8 billion write-down and a dip in quarterly operating profit that the firm disclosed on Saturday.

The write-down of Berkshire Hathaway's 27.4% stake in Kraft Heinz, its second for the company, reflects a significant decline in the value of the investment.

Berkshire had taken a $3 billion write-down in Kraft Heinz in 2019. The conglomerate is still the largest shareholder of the food and beverage firm, as per data compiled by LSEG. Kraft Heinz, which is ranked 8th in Berkshire's portfolio by market value, has faced challenges as more consumers turn to healthier options and private-label products.

The conglomerate also reported a 4% dip in operating income, which fell from $11.6 billion the year earlier, as underwriting premiums fell and trade policy uncertainties hurt most of Berkshire's consumer businesses over delayed orders and shipments.

The Omaha, Nebraska-based company, which has not repurchased any shares since May 2024, indicated it remains cautious about market valuations amid ongoing uncertainty over tariffs and economic growth.

"The investment vehicle has stopped building up its cash pile, to end a run of eleven straight quarters that began in the third quarter of 2022 and doubled the amount of liquidity available," Russ Mould, investment director at AJ Bell, said.

Mould painted this as a worry for Berkshire in the long run.

SUCCESSION WOES

Class A shares of the company, which have gained about 2% in 2025, lagged the benchmark S&P 500 index. The stock shed gains since Buffett's announcement in May to step down as the CEO of the conglomerate at the end of the year, compared to a broader market rally.

Buffett, 94, has led the company for over five decades. Greg Abel, now a Berkshire vice chairman, is set to take up the mantle later in the year.

"The share price continues to slide, even as the U.S. stock market rallies, to perhaps suggest that investors are yet to convince themselves that Berkshire Hathaway will be the same without Warren Buffett and Charlie Munger as it was with them in charge," Mould said.

Charlie Munger, the long-time vice chairman of Berkshire and the right-hand man of Buffett, passed away in 2023 at the age of 99.

Berkshire's Class B shares were also down 3.3% in afternoon trading.

(Reporting by Pritam Biswas in Bengaluru; Editing by Alan Barona)

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