Kraft Heinz takes another $1 billion hit

Kraft Heinz released its second quarter earnings report delayed by accounting problems and revealed continued fall-out related to those issues on top of weak sales.

The company that makes Oscar Mayer hot dogs, Kool-Aid, Heinz ketchup and Velveeta took charges in excess of $1 billion in the first half due in part to the “perceived risk” to the value of the company during a very rough year in which its stock has been cut in half.

Shares of The Kraft Heinz Co. tumbled another 14% to an alltime low Thursday.

The company, created in a 2015 merger crafted by billionaire Warren Buffett and Brazilian private equity firm 3G Capital, had been trying to regain its footing and follow vast changes in what people eat and how they perceive the company’s most iconic brands.

Then, early this year, Kraft Heinz disclosed an investigation into its accounting practices by federal regulators and said it would slash the value of its Oscar Mayer and Kraft brands by more than $15 billion.

While company executives were cleared in the investigation, which focused on a relatively small number of people in its procurement operations, Kraft Heinz was forced to adjust past results reported to the Securities and Exchange Commission.

That damage continued to play out in the quarterly results released Thursday.

Kraft recorded charges of $474 million in the quarter, “primarily driven by the application of a higher discount rate to reflect the markets’ perceived risk” to the company’s value.

Profit during the first half of 2019 dropped almost 55%.