Berkshire Hathaway shares plunged as much as 3.4% Monday following the company’s $3.8 billion impairment on its Kraft Heinz stake.
The dramatic writedown slashed the carrying value of Berkshire’s holding to roughly $8.4 billion, down from more than $17 billion at the end of 2017.
The writedown reflects lingering pressures at Kraft Heinz, where inflation and a consumer shift away from packaged goods have weighed on its flagship brands, Heinz ketchup, and Kraft Mac & Cheese.
Its share price is down more than 10% year-to-date as of Friday’s close, and the company is reportedly considering a spin-off of part of its business as part of a strategic reset.
The Kraft Heinz impairment underscores how a single large non‑financial investment can sway Berkshire’s earnings and investor confidence.
While the core operations remain resilient, analysts flag succession risks as Buffett plans to step down at year-end, with Greg Abel set to take over as CEO, though Buffett will remain chairman.
The company’s net income for the Second quarter dived 59%, from $30.3 billion a year ago to $12.37 billion.
Operating profit fell around 4% to $11.2 billion, with nearly $877 million of that decline attributable to currency losses linked to yen‑denominated debt.
Despite the setback, Berkshire ended Q2 with about $344 billion in cash nearly record high.
The company again refrained from repurchasing any shares, for the fourth straight quarter, even as its stock declined over 12% following Warren Buffett’s May retirement announcement.
Going forward, much hinges on whether Berkshire will resume buybacks, pursue acquisitions, or face further write-downs.
