Berkshire Hathaway Q1 Earnings Decrease Y/Y on Higher Expenses

Berkshire Hathaway Inc. (BRK.B) delivered first-quarter 2025 operating earnings of $9.6 billion, which decreased 14% year over year. The decrease was due to lower earnings in insurance-underwriting, manufacturing, service and retailing businesses and other. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Behind the Headlines

Revenues declined 0.1% year over year to $89.7 billion, due to a decrease in revenues in Insurance and Other.

Costs and expenses increased 3% year over year to $78.3 billion, largely driven by a rise in costs and expenses in Insurance and Other. Our estimate was $81 billion.

Segment Performance

Berkshire’s Insurance and Other segment revenues decreased 0.3% year over year to $77.6 billion in the reported quarter due to lower sales and service revenues. 

Insurance underwriting produced operating earnings of $1.3 billion, which decreased 48% year over year.

Railroad operating revenues rose 0.5% year over year to $5.6 billion, primarily due to a 4.1% increase in unit volume and core pricing gains. It was partially offset by a decline in average revenue per car/unit resulting from lower fuel surcharge revenue and unfavorable business mix. Pre-tax earnings increased 5.5% in the first quarter of 2025 to $1.6 billion.

Operating earnings from the Railroad business increased 5.6% year over year to $1.8 billion. 

Total revenues at Manufacturing, Service and Retailing decreased 3.2% year over year to $51.5 billion. Pre-tax earnings decreased 1.3% year over year to $4 billion.

In the first quarter of 2025, after-tax earnings from manufacturing, service and retailing businesses decreased slightly year over year.
Earnings reflected an overall increase from service and retailing businesses and an overall decrease from manufacturing businesses. The majority of businesses experienced lower revenues and earnings in the first quarter of 2025. 

Financial Position

As of March 31, 2025, consolidated shareholders’ equity was $656.7 billion, up 0.7% from the level as of Dec. 31, 2024. At the end of the quarter, cash and cash equivalents and restricted cash were $42.8 billion, up 18.5% year over year.

Berkshire exited the first quarter of 2025 with a float of about $173 billion, up from $171 billion as of Dec. 31, 2024.

Cash flow from operating activities totaled $10.9 billion in the reported quarter, up 3.2% from the year-ago period.

Zacks Rank

Berkshire Hathaway currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other P&C Insurers

Arch Capital Group Ltd. ACGL reported first-quarter 2025 operating income of $1.54 per share, which beat the Zacks Consensus Estimate by 12.4%. The bottom line, however, declined 37.1% year over year. Gross premiums written improved 8.9% year over year to $6.4 billion. Net premiums written climbed 10.5% year over year to $4.5 billion on higher premiums written across its Insurance and Reinsurance segments.

Net investment income grew 15.6% year over year to $378 million and beat our estimate of $436.2 million. The Zacks Consensus Estimate was pegged at $415 million. Operating revenues of $4.5 billion rose 21.2% year over year, driven by higher net premiums earned and net investment income. It missed the Zacks Consensus Estimate by 0.9%.

RLI Corp. RLI reported first-quarter 2025 operating earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 10.7% year over year, driven by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.9%. 

Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%). Our estimate was $577.9 million. Net investment income increased 12% year over year to $36.7 million. The Zacks Consensus Estimate was pegged at $38.6 million, while our estimate for the metric was $38.9 million. The investment portfolio’s total return was 1.3% in the quarter. 

Cincinnati Financial Corporation CINF reported first-quarter 2025 operating loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. CINF had reported an operating income of $1.72 per share in the prior-year quarter. The year-over-year decrease of $309 million was primarily due to a $356 million increase in after-tax catastrophe losses.

Total operating revenues in the quarter under review were $2.6 billion, which missed the Zacks Consensus Estimate by 2.5%. The top line, however, improved 13.3% year over year. Net written premiums climbed 11% year over year to $2.5 billion. Investment income, net of expenses, increased 14% year over year to $280 million, as bond interest grew 24% and stock portfolio dividends declined 7%. The figure was higher than our estimate of $274.8 million. 

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