Kraft Heinz, the owner of Oscar Meyer, Velweet and Planters' kernels, is now trying to make money that can be used to repay the long-term debt of nearly $ 31 billion.
"Its balance sheet has increased," JPMorgan Chase analyst Ken Goldman wrote in a report late last week.
Goldman noted Kraft Heinz's earnings were "flat," revenues were "lowered" and the balance was "leveled."
"This is not an ideal progression of financial performance," Goldman writes.
And this is not to mention the SEC's investigation into Kraft Heinz's books, which the company reveals. Debt Issues by Kraft Heinz serve as yet another reminder of the large sums of debt Corporate America has taken over a decade of exceptionally low interest rates (1
. General, Another US-based flooring company is also competing to disassemble to raise money that can be used to reinforce the balance. And GE, who has long boasted for a steady dividend, has reduced its profitable profit to a penny.
Kraft Heinz sits to $ 30.9 billion in long-term debt, compared to $ 28.3 billion a year ago. This is equivalent to a significant leverage that is 4.4 times higher than the adjusted earnings for 2018.
The balance may be even tougher this year. Kraft Heinz predicts profits for 2019 will drop sharply to about $ 6.4 billion. This will raise the level of leverage to an unpleasantly high set of 4.8. Deep cutting of costs goes back to the pursuit of Craft Heinz
Kraft Heinz's crash shows how accruing tons of debt can be problematic when the strategy of the management team is interrupted. Years of cost-cutting to bone finally returned to pursuing Kraft Heinz.