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(Bloomberg) – Kraft Heinz Co. has recorded a $ 15.4 billion non-cash charge to write down assets, including some of its best-known brands, a striking recognition that changing consumer tastes consumers has destroyed the value of some of the most iconic products of the company. .
The packaged food giant's fee to reduce the goodwill of the Kraft and Oscar Mayer brands and other assets, combined with disappointing fourth quarter results and an accounting assignment by securities regulators , pulled stocks down to a record high if declines were down hold in trading on Friday.
The charges resulted in a net loss of $ 12.6 billion, or $ 10.34 per share. Kraft Heinz shares fell by 18% at 18:30. At New York.
Formed as part of a merger orchestrated in 2015 by Berkshire Hathaway Inc. of Warren Buffett and private equity firm 3G Capital, Kraft Heinz's portfolio is located primarily at the center of Grocery, an area hard hit by age-old changes in eating and shopping habits. at the greatest risk of being disturbed by Amazon.com Inc.
The company has tried to bring to life a range of tired brands, ranging from organic Capri Sun to Oscar Mayer's natural hot dogs. But the most important question in the minds of investors is the ability of management to conclude major transformation contracts that shareholders are seeking.
Kraft Heinz has been trying to buy Unilever in 2017 to help management do what it does best: reduce overhead costs. But Unilever rejected the $ 143 billion deal and Kraft Heinz shares have since lost about half of their value as investors wait for the next big move.
Thursday, the company's profits for the fourth quarter do not even reach the lowest estimates of analysts. It also reported to investors in its quarterly results a subpoena that it had received last year from the US Securities and Exchange Commission and related to its purchasing practices. Kraft Heinz said that as a result of an investigation conducted with the help of an outside lawyer, the company had recorded a "cost of goods increase" of 25 millions of dollars.
Berkshire Hathaway's investment jumped from about $ 15.7 billion to $ 12.9 billion as the stock fell to $ 39.66 at 6:15 pm At New York. Thursday's announcement is the second time this year that a Berkshire holding has revealed adverse news after the markets close, affecting its actions. Apple Inc. reduced its revenue outlook in January, to the detriment of shareholders. This stock has since recovered.
Kraft Heinz will reduce its quarterly dividend from 62.5 cents to 40 cents per share, which will help it repay its debt faster and adjust to its smaller size after the sale of certain businesses. The company was paying the highest dividends on the profits of its US counterparts in packaged food.
(Adds the value of the investment Buffett to the 8th paragraph.)
–With the help of Katherine Chiglinsky.
To contact the reporter about this story: Craig Giammona in New York at [email protected]
To contact the editors responsible for this story: Anne Riley Moffat at [email protected], Rob Golum
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