Berkshire Hathaway Earnings: Solid Insurance Results Continue to Buoy Revenue and Profitability

Key Morningstar Metrics for Berkshire Hathaway

• Fair Value Estimate: $487
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Low

What We Thought of Berkshire Hathaway’s Earnings

Berkshire Hathaway BRK.B BRK.A reported adjusted second-qu arter operating results that were basically in line with our expectations, with the firm continuing to benefit from solid results from its insurance businesses even as other parts of the company falter.

Why it matters: Berkshire has historically offset underperformance in one or more parts of its portfolio with outperformance in others, with the firm’s insurance operations doing the heavy lifting in the past few years.

• Following a period of outstanding results, the insurance operations normalized somewhat in the first half of 2025 as smaller price increases and higher catastrophe losses (primarily in the first quarter) impacted underwriting results.
• Unfortunately, BNSF continues to underperform Union Pacific, despite seeing an improvement in its operating ratio in the second quarter.
• As for Berkshire Hathaway Energy, the unit saw an improvement in second-quarter results but signaled that future results may be impacted by recent legislation aimed at curbing investments in renewables.
• The manufacturing, service, and retailing division did post a weaker quarter on the top line, but profitability did improve year over year.

The bottom line: With narrow-moat Berkshire’s second-quarter operating results essentially in line with our expectations, we expect to maintain our Class A $730,500 per share fair value and $487 Class B per share fair value in place and view Berkshire stock as slightly undervalued.

• Excluding the impact of investment gains/losses and other adjustments, second-quarter adjusted operating revenue declined 1.2% year over year to $92.5 billion.
• Adjusted operating earnings also declined 3.8% year over year to $11.2 billion, as solid insurance results continue to compensate for ongoing weakness in other segments.
• Book value per Class A share, which serves as a decent proxy for measuring changes in Berkshire’s intrinsic value, increased 10.9% year over year to $464,454 from $418,806 at the end of June 2024.