Ha!
From CNBC, May 4:
Warren Buffett said Kraft Heinz is in a dispute with its auditor, so Berkshire Hathaway doesn’t have the food company’s financials.
- “The auditor, which is Pricewaterhouse[Coopers] in this case, hasn’t signed off on the 10-k,” Buffett says. “There’s something going on.”
- In Berkshire’s first-quarter earnings report, the company said Kraft Heinz has not filed its 2018 Form 10-K with the Securities and Exchange Commission or made its financials available to Berkshire.
- Berkshire is Kraft’s largest shareholder.
- Kraft Heinz has been struggling with its legal woes as it received a subpoena from the SEC related to its accounting policies and internal controls.
“The auditor, which is Pricewaterhouse[Coopers] in this case, hasn’t signed off on the 10-k,” Buffett told a group of reporters ahead of Berkshire Hathaway’s annual meeting at the CHI Health Center in Omaha, Nebraska. “They have to explain why they haven’t signed off, but they haven’t signed off...There’s something going on.”
In Berkshire’s first-quarter earnings report, the company said Kraft Heinz has not filed its 2018 annual report with the Securities and Exchange Commission or made its first-quarter financials available to Berkshire. So, Berkshire’s latest results excluded its share of Kraft Heinz’s earnings.
“We account for Kraft on the so-called equity method — we pick up the shares of our earnings, and we don’t have a a figure for their earnings and they can’t put out the figure for their earnings currently,” Buffett said.....MORE
Berkshire owns more than 325 million shares of Kraft Heinz, or a market value of $14 billion, according to its 2018 annual letter, making it the largest single shareholder. Kraft Heinz has been struggling with its legal woes as it received a subpoena from the SEC related to its accounting policies and internal controls. It further disappointed investors earlier this year with the news that it slashed its dividend by 36% and took a $15.4 billion write-down on Kraft and Oscar Mayer, two of its biggest brands....
The stock has not been doing well:
Packaged Goods: "Kellogg to replace CFO, earnings dive 36.5 percent; shares drop" (K; GIS); KHC
One of our favorite stories of the last ten years is the decline of the packaged food companies....
And going back to 2017:
March 7, 2017
M&A In European Food
I'm not sure that consumer packaged goods is the area to be in, at least not in the U.S. and not based on names like Kellogg or General Mills.May 3, 2017
For a quarter-century those manufacturers ratcheted prices as though they were tobacco companies but people find it easier to give up their Cheerios than their cigarettes.
The managements milked that approach for pretty much all it was worth so, as operating entities, they aren't all that attractive but someone will decide the only thing left to do is to asset strip or dividend recap the life out of the former cash cows.
Top o'the market to ya....
The Disaster That Is American Packaged Food (K; GIS)
Not talking nutrition here, just shareholder wealth destruction.With many more in-between. Use the 'search blog' box, upper left, if interested.
We've been posting on the profit potential on the short side for the last couple years and things have only gotten worse for the former giants over the last few months:...
