Berkshire Hathaway Inc. (NYSE:BRK) unveiled a leadership transition plan as Gregory E. Abel steps into the chief executive role, pledging to preserve the conglomerate’s long-standing culture and capital discipline.
“Warren is obviously a very hard act to follow,” Abel wrote in the company’s annual report.
Earnings Snapshot
Fourth-quarter operating earnings totaled $10.2 billion, down 29.8% from $14.56 billion in the year-earlier period.
For the full-year 2025, operating earnings totaled $44.49 billion, down from $47.44 billion in the year prior.
Cash holdings dropped to $373.3 billion from $381.6 billion in the third quarter, despite no share repurchases, per a CNBC report.
As of December 31, 2025, Berkshire Hathaway’s equity portfolio remained heavily concentrated, with five companies:
- American Express Company (NYSE:AXP): 22.1% owned.
- Apple Inc. (NASDAQ:AAPL): 1.6% owned.
- Coca-Cola Company (NYSE:KO): 9.3% owned.
- Moody’s Corporation (NYSE:MCO): 13.9% owned.
Additionally, the company owns shares of Occidental common stock.
“As of December 31, 2025, our investment in Occidental preferred stock had an aggregate liquidation value of approximately $8.5 billion,” Berkshire said. “To date, Occidental has redeemed approximately $1.5 billion of the aggregate liquidation value due to excess distributions, as defined under the terms of the Occidental preferred stock certificate of designations, to its common stockholders.”
Focusing Japan
In its 2025 annual report, the company highlighted its stake in five Japanese trading companies that generate significant dividends and global reach.
Berkshire holds equity in trading giants including Mitsubishi Corporation, Itochu Corporation, Mitsui & Co., Ltd., Marubeni Corporation and Sumitomo Corporation.
These companies operate across energy, logistics, commodities, and consumer sectors.
Berkshire has borrowed in Japan an amount roughly equivalent to the yen invested (cost basis), at an average cost of 1.2%, with a weighted-average life of approximately 5.75 years.
Taking these positions together, at year-end they totaled $194 billion in market value, representing nearly two-thirds of the $297.8 billion equity securities portfolio, providing combined dividends of $2.5 billion and yielding 10% on their original cost basis of $24.5 billion.
Market moves show investors have responded positively. Japanese trading house shares have rallied after Berkshire signaled continued support and possible expansion of its stakes.
The Japan focus complements Berkshire’s domestic and global holdings.
Abel Says Insurance Remains Core
Abel reminded investors that Berkshire’s insurance arm remains its financial engine.
He highlighted disciplined underwriting and long-term thinking as central pillars. He also reiterated that integrity remains nonnegotiable, citing Buffett’s 1991 warning: “Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.”
Berkshire ended 2025 with more than $370 billion in cash and Treasury holdings.
Abel called the balance sheet a strategic advantage during volatile markets. He said management prefers buying productive businesses over holding government debt.
“Our approach to cash dividends continues to be that Berkshire will not pay dividends so long as more than one dollar of market value for shareholders is reasonably likely to be created by each dollar of retained earnings,” Abel wrote.
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