Berkshire Hathaway's operating earnings came to about $48 billion over the four reported quarters through June, and the businesses it owns outright — not its famous stock portfolio — produced most of that total. Dividend income from the portfolio has fallen for two straight years, while the manufacturing, service and retailing group became the single largest contributor.
Berkshire Hathaway's wholly owned businesses, not the stock picks Warren Buffett spent decades assembling, generate most of what the conglomerate earns. Its portfolio was worth about $324 billion when the second quarter ended, yet a major railroad, utilities, GEICO and other insurers, and dozens of manufacturers, service companies and retailers supply the bulk of the earnings instead.
A $48 billion operating engine
Operating earnings, Berkshire's preferred measure, strip out swings in the value of its stockholdings. Second-quarter operating earnings totaled about $13 billion, 16% higher than a year earlier.
The manufacturing, service and retailing group led the four reported quarters, adding about $14.7 billion after taxes. Insurance investment income contributed about $12 billion. Insurance underwriting, railroad BNSF and Berkshire Hathaway Energy added about $7.4 billion, $5.7 billion and $4.2 billion respectively.
Operating earnings dipped about 6% in 2025 on softer insurance underwriting, but rebounded 17% year over year through this year's first six months, helped by currency gains on non-dollar debt and growth in the underlying businesses. Berkshire also kept adding to that manufacturing group: it bought chemicals maker OxyChem for about $9.4 billion in January and closed an $8.5 billion deal, including debt, for homebuilder Taylor Morrison in late July.
What the stock portfolio actually pays
The portfolio contributes through dividends, but the amount is smaller than many investors assume. Berkshire's insurers, which hold the bulk of the portfolio, collected $5.5 billion of dividends in 2023, then about $5.1 billion last year, the second straight annual decline. Set the roughly $5.1 billion of pretax dividends over the four quarters through June against $48 billion of after-tax operating earnings, and the portfolio's cash contribution works out to about a tenth of what the company earns, at most.
Interest and other investment income, meanwhile, came to about $9.6 billion over those four quarters, thanks largely to the more than $210 billion in cash and U.S. Treasury bills its insurers held at midyear. In other words, the cash pile pays Berkshire nearly twice as much as the stock portfolio does.
Reported earnings run hotter than operating earnings
Accounting rules require Berkshire to run changes in the value of its stockholdings through its income statement each quarter, whether it sells a share or not. Over the four quarters through June, investment gains added about $42 billion and helped swell reported net earnings to about $86 billion.
Berkshire itself plays down those swings. According to the company's latest earnings release: "is usually meaningless".
At about $507 per Class B share, Berkshire's market value is about $1.1 trillion. Against $86 billion of reported earnings, the stock trades at about 13 times earnings, but against the $48 billion of operating earnings, the price comes to about 23 times earnings — a fuller P/E ratio.
Source: The Motley Fool
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