The diluted EPS is down around 25-50% since the 3Y period started depending on which quarter you're examining, as the last 2 quarters have a range of $0.33 - $0.37 since the big $15B impairment (also shown with the steep drop in EPS). Since shares outstanding fell in this 3 year period, we can deduce that the levels of EPS were supported by a falling shares outstanding figure and not necessarily indicative of real profits for the business. I've included Shares Outstanding because it gives context on EPS. The chart for Diluted EPS tells a more sobering tale, and represents one of the major reasons behind the disappointment on Wall Street:
![largest goodwill writedown largest goodwill writedown](https://www.hd.square-enix.com/eng/ir/library/docs/110513/images/slide05_b.jpg)
While Net Sales haven't improved since the merger, it hasn't dropped terribly even after the large $15B impairment, which is encouraging. Remember that the large jump in 2015 was mostly due to the merger, and not anything organically inside the business. For perhaps a better visualization on this quarter's results compared to the company's recent history, let's examine this chart: But, the financials from 2018 were restated, so we have to keep those YOY numbers in context.
![largest goodwill writedown largest goodwill writedown](https://gtamarketing.com/wp-content/uploads/2018/12/Chart-Biggest_Acquisitions.png)
For the YTD, that represents a drop from $12.994B to $12.365B YOY which doesn't seem too bad. So let's look at the latest 10-q and see how the company has done since.įor the 2Q 2019 quarter, the company's Net Sales dropped from $6.69B to $6.406B YOY. It was because of lower profitability and earnings power that these assets got written down, and so that usually means a tough future ahead and a long road to better profitability. The goodwill and intangible asset impairments aren't just a slap on the wrist and be done with it story. While a low valuation such as a P/B under 1 and dividend yield above 5% can make for a tempting offer, it's usually better to wait for tangible improvements in the company's financials before taking a value play. Before we get too excited, however, we need to understand that turnaround stories take time. Of course, many other analysts have downgraded the stock, especially after that double whammy of bad news back in February.īut, there could be hope on the horizon as the company hired a new CEO, and started to unwind some of its brands for better financial stability and efficiency. Piper Jaffray recently called a bottom, and Morgan Stanley and Societe Generale upgraded KHC from their Underweight and Sell ratings respectively. Since all of the devastating news, analysts have mixed opinions.
![largest goodwill writedown largest goodwill writedown](http://chinafilminsider.com/wp-content/uploads/2020/05/1589319519726082.jpg)
Now, they've continued their tardy behavior with 2 more late 10-q's, the most recent finally filed on August 13th, 2019. Then came the warnings from the NASDAQ and S&P 500 for filing their 10-k late. First it was the -36% dividend cut and the $15B Goodwill Impairment charge (which I warned about back in 2017 in my Seeking Alpha article: Kraft Heinz's Intangible Assets Might Not Be As Valuable As Presented). The negative news just keeps pouring in for Kraft Heinz ( NASDAQ: KHC).