Kraft shares tumble after delayed 10Q filing, booking $1.22 billion in charges

[tacobell fan]

• Shares of Kraft Heinz fell on Thursday, after it said it was delaying its quarterly filing and disclosed write-downs totaling $1.22 billion.
• The company disclosed earlier this year it had received a subpoena from the Securities and Exchange Commission into its accounting policies and internal controls.

[tacobell fan]

Shares of Kraft Heinz fell 8% on Thursday, after it said it was delaying its quarterly filing and disclosed write-downs totaling $1.22 billion.

“The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward,” Miguel Patricio, the company’s new CEO said in a statement. ” We have significant work ahead of us to set our strategic priorities and change the trajectory of our business.”

 

The company disclosed earlier this year it had received a subpoena from the Securities and Exchange Commission into its accounting policies and internal controls. The SEC investigation launched an internal review, which caused Kraft Heinz to twice delay filing its annual report.

In May, one of the company’s biggest investors, Warren Buffett said Kraft Heinz was in “a dispute with its auditor. ”

It filed that report in June, saying it had completed an internal review of its procurement practices. The internal review identified adjustments that resulted in an understatement of the cost of products sold totaling $208 million, including misstatements of $175 million.

Kraft Heinz then cautioned the SEC investigation was ongoing.

In forms filed Thursday, with its preliminary second-quarter results, Kraft Heinz said it was writing down the value of two of its business units: its business in Eastern emerging markets, Brazil, United States Refrigerated, and Latin America Exports by approximately $744 million and “certain intangible assets” of $474 million ” to reflect the markets’ perceived risk in the Company’s valuation.”

Those write-downs come after the company wrote down two of its biggest brands, Kraft and Oscar Mayer, by $15 billion, earlier this year.

[r2d2]

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