We've all seen this too many times.
A stock starts to climb, everyone gets pumped up, and then they release the bad news.
Remember the last time they released earnings, everything came crashing down fast!
i found the answer. and no i do not expect any more goodwill writeoffs as they have closed the ones that were losing money. goodwill represents just 10% of total assets which is about right for this type of business
explain to me then since you know everything about this company, why did intangible assets fall last year from 33 to 5 million and goodwill rise when they made no china hog operation acquisitions? just m2p2 in q4. what caused the increase in goodwill then? it makes no sense for it to be from china hog business.
so the company wrote down intangible assets in q4 last year from 33 million to 5 million and in the same quarter, when they made no farm purchases for china hogs in q3 or q4 last year, goodwill for china hog operations goes from 0 to 22 million? please explain this then if it's not from the m2 acquisition. what caused goodwill to increase? in order for goodwill to increase, you have to purchase an asset. it is not created out of thin air.
Actually, rhbull is right. Whether or not that came from the M2P2 acquisition makes no difference. Its still a ledger entry to their overall corporate B/S and this entry could conceivably take it to zero, or even less, if appropriate. Example: suppose you bought a purely service company for a million dollars that had no assets? Conceivably, you're buying $1 mil in good will which needs to be appraised annually thereafter. If the investigative committee turns up results that the assets and good will FEED bought overly exceeded the justified evaluation of the farms in 2008, they will have to make the appropriate entry.
But, like I said, what does this do to their prospects for Q1 2012? Not sure it does anything, unless we're talking about an extraordinary amount; like $50 mil or more. Even so, Q1 will stand on its own merits.