New York: Berkshire Hathaway shares declined sharply on Monday, marking their steepest fall since Warren Buffett revealed plans to step down as chief executive, after the conglomerate reported weaker than expected results and signalled a cautious approach to deploying its vast cash reserves.
Class A stock dropped as much as 5.3 per cent in afternoon trading, with Class B shares recording a similar slide. The last comparable decline occurred in May last year when Buffett announced that Greg Abel would assume the CEO role in 2026. Buffett, who has led the company since 1965, continues to serve as chairman.
Profit Slump and Insurance Pressure
The company said fourth-quarter operating earnings fell 30 per cent to $10.2 billion. The figure excludes gains and losses on common stock holdings, including Apple. A significant drag came from insurance operations, where profits at Geico and related businesses declined 38 per cent overall.
In his first annual shareholder letter as incoming chief executive, Abel cautioned that Geico could face continued competition as rivals cut auto insurance premiums. He also flagged pricing pressures in broader insurance and reinsurance markets amid rising capital inflows.
No Immediate Buybacks or Dividends
Despite maintaining that Berkshire’s $373 billion cash position does not represent a withdrawal from investment activity, Abel did not outline plans to resume share buybacks or introduce a dividend. The company has refrained from repurchasing stock for over a year and a half.
Abel reiterated the group’s long-term investment philosophy, stating that capital deployment would remain measured and value-driven.
Analysts reacted cautiously to the update. Keefe, Bruyette & Woods analyst Meyer Shields said the results broadly fell short of expectations, citing softness in the BNSF railroad as well as in energy, manufacturing and retail segments. He reduced his 2026 earnings forecast by 5 per cent.