Berkshire Hathaway Inc. (Berkshire Hathaway (BRK)) said Saturday that first-quarter 2026 net earnings attributable to shareholders climbed to $10.106 billion, more than double the $4.603 billion posted a year earlier, as operating profit rose despite investment-market swings. The results arrive as a $373 billion cash pile takes center stage and the stock has lagged: Berkshire is down 11.19% year over year while the S&P 500 gained 29.5%.
According to Berkshire Hathaway's earnings report, operating earnings of $11.346 billion for the quarter, up from $9.641 billion, while investment gains and losses were a $1.240 billion drag versus a $5.038 billion hit in the prior-year period. Net earnings per average equivalent Class A share were $7,027 and Class B were $4.68, compared with $3,200 and $2.13, respectively, a year earlier.
That gap between business performance and share performance has become part of the investor conversation, with some shareholders looking for CEO Greg Abel to demonstrate his approach before adding exposure. Lawrence Cunningham, a University of Delaware governance professor, said some buyers may want to see Abel "prove himself in his job," even as he described the market as "expressing caution."
Berkshire's Earnings: What Lies Beneath?
According to the earnings report, Berkshire also cautioned that quarterly net income can be distorted by GAAP rules that route unrealized equity moves through earnings, and it argued those figures can mislead investors who don't follow the accounting details. According to Berkshire, investment results included about $7.0 billion of losses tied to shifts in unrealized gains on equity holdings during the quarter, along with $5.8 billion of after-tax realized gains from selling investments.
Within operating earnings, insurance underwriting contributed $1.717 billion, up from $1.336 billion, while insurance investment income slipped to $2.679 billion from $2.893 billion. BNSF generated $1.377 billion versus $1.214 billion, Berkshire Hathaway Energy delivered $1.114 billion versus $1.097 billion, and manufacturing, service and retailing rose to $3.199 billion from $3.060 billion.
The "other" bucket jumped to $1.260 billion from $41 million, helped by a swing to $249 million in foreign-exchange gains from $713 million in losses a year ago, plus $967 million of interest and dividend income tied to U.S. Treasury bills and other investments. Those Treasury-bill returns sit alongside the cash stockpile that investors have increasingly focused on as Berkshire's market value has grown.
The shared reader stake in both the earnings and the market backdrop is whether capital allocation choices can rebuild confidence when the stock trails the broader index. Berkshire's repurchase program, paused since May 2024, restarted in March, marking its first buyback activity since that earlier halt.
Cash Reserves Under Pressure Amid Earnings Decline
This shift in leadership coincides with significant scrutiny on Berkshire's cash-heavy balance sheet, as Abel prepares to address concerns about the company's future investment strategy.
In the fourth quarter of 2025, Berkshire reported a decline in operating earnings to $10,200 million from $14,527 million in 2024, underscoring the challenges Abel faces in revitalizing shareholder confidence amidst a $373 billion cash reserve that has garnered investor attention as detailed in a recent report.
As Abel navigates this transition, the market's focus is on whether he will unveil a new approach to capital allocation, particularly given the company's reported net income drop to $66,968 million for 2025 from $88,995 million in 2024. This context highlights the importance of effectively managing Berkshire's substantial cash reserves, especially as investors look for clearer signals on future growth strategies.
How Abel's Leadership Will Shape Future Strategy
That shift matters because Berkshire's shares have struggled to keep pace even as the company posts higher operating profit, and the underperformance has been visible across multiple time frames. Class B shares were down 5.78% year to date while the S&P 500 was up more than 5%, and the stock finished Thursday at $473.60, down 0.37%, before ticking up 0.20% in Friday premarket.
Over the last month, the stock was off 0.22%, and it was lower by about 1.035% over six months, alongside weak trend readings across short-, medium- and long-term windows in market data and a poor quality score. The company's first-quarter numbers showed a business throwing off more operating income, but the market has still demanded clearer signals on how that cash will be put to work.
Paul Lountzis, president of Lountzis Asset Management, said deploying the capital will "play a pivotal role in Berkshire's future," while also noting many of Berkshire's operating units tend to be steady. He also pointed to a structural challenge: Berkshire's sheer size makes it harder to produce rapid growth.
The annual meeting itself is changing in ways that could influence how investors judge Abel's stewardship. Abel is set to deliver a one-hour presentation on his own before moving into Q&A with other executives, a format that replaces the long-running back-and-forth style that Warren Buffett held with the late Charlie Munger.
Understanding The Impact Of Cash Reserves
Cash has become the headline issue because Berkshire ended 2025 with $373 billion, and the company has largely avoided large-scale deals for roughly a decade. One recent exception was a $9.5 billion acquisition of Occidental Petroleum Corp. (Occidental Petroleum (OXY)) in January.
Berkshire's insurance engine continues to provide funding flexibility, with float at about $176.9 billion at March 31, up roughly $500 million since the end of 2025, as Berkshire noted. The company also said it had 1,437,903 Class A equivalent shares outstanding at quarter end.
