Greg Abel, in his first shareholder letter as chief executive of Berkshire Hathaway, affirmed his commitment to maintaining the conglomerate’s robust financial position whereas signaling no retreat from strategic investments. The letter, released Saturday, underscored Abel’s intention to uphold the investment principles established by his predecessor, Warren Buffett, who stepped down from the role in January.
Abel, 63, emphasized that Berkshire’s substantial cash reserves – totaling $373 billion at year-end – are not indicative of diminished deal-making appetite. He pointed to the recent $9.7 billion acquisition of Occidental Petroleum’s chemicals business and an agreement to purchase Bell Laboratories as evidence of continued investment activity. “Our balance sheet is a strategic asset to be deployed at the right time,” Abel wrote, adding that Berkshire would remain “an asset, not a risk, to America and the global financial system.”
The letter detailed Berkshire’s fourth-quarter and full-year financial results, which revealed a weakening in operating earnings. Operating earnings fell 30 percent in the fourth quarter to $10.2 billion, driven by a slump in the insurance division’s profits. Net income decreased 2.5 percent year-over-year to $19.2 billion and full-year net profits were down 25 percent to $67 billion. Abel cautioned against drawing firm conclusions from net income figures, citing the volatility of Berkshire’s $298 billion stock portfolio.
Writedowns of Berkshire’s stakes in Occidental Petroleum and Kraft Heinz contributed to the decline in full-year profits, totaling $8.3 billion. Abel characterized the investment in Kraft Heinz as a “disappointment,” suggesting a potential exit from the packaged foods group. Despite the downturn, Abel reiterated that Berkshire’s operating businesses demonstrated durability and offered opportunities for improvement.
Abel also addressed intensifying competition within the insurance industry, noting an influx of capital from private investment groups impacting pricing. He affirmed Berkshire’s longstanding practice of reducing underwriting activity when premium rates are unattractive. The company continued to reduce its equity portfolio, selling $3 billion worth of stock in the final quarter of 2025, bringing total stock sales since 2022 to $187 billion.
The leadership transition at Berkshire Hathaway has been underway for some time. Warren Buffett had designated Abel as his successor in May 2023, a move that surprised some investors who had anticipated a transfer of power upon Buffett’s death, according to previous reports. Buffett, 95, continues to come into the office five days a week and remains available to Abel, but the fresh CEO is already implementing changes, including the hiring of Berkshire’s first internal legal counsel and the appointment of a new chief financial officer from Berkshire Hathaway Energy, the unit Abel previously led.
Todd Combs, a longtime investment deputy to Buffett, has departed for JPMorgan Chase as part of the restructuring. Abel noted that Combs’s stock portfolio is now being overseen by Ted Weschler, another of Berkshire’s investment managers. “At Berkshire, equity investments are fundamental to our capital allocation activities; responsibility ultimately resides with me as CEO,” Abel stated.
The letter marked a stylistic departure from Buffett’s annual missives, adopting a more straightforward tone and occasionally employing corporate jargon. Abel did, however, continue Buffett’s tradition of highlighting areas for improvement across Berkshire’s diverse businesses. He also plans to expand the visibility of Berkshire’s leadership team, with several top executives joining him on stage at the company’s annual meeting in May, including Ajit Jain, head of insurance operations, BNSF chief executive Katie Farmer, and Adam Johnson, who oversees consumer products and retail units.
Abel stated he does not intend to provide quarterly earnings commentary, a practice Buffett also avoided. He acknowledged Buffett as “a very hard act to follow.”