This is bad news for Tyson, given that beef is the largest revenue generator for the company.
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Tyson reported an operating loss of $7 million in the beef business.
Tyson Foods (NYSE:TSN) last released its quarterly earnings data on Monday, May 4th.
Sales for the quarter increased 4 percent to $10.07 billion from $9.68 billion in the year-ago quarter. But the result similarly fell below the $10.298 billion prediction by analysts. On average, ten analysts polled by Thomson Reuters expected earnings of $0.92 per share.
Company shares slid 9 percent in early trading.
Tyson is highly dependent on both the cost of inputs like grain as well as the price of chicken, beef, and pork, and the third quarter exposed a few negative trends. During the same quarter in the previous year, the company posted $0.60 earnings per share.
Global sales dropped 33%, because of the sale of its Brazil business and weak demand in China.
Last quarter, the company reported EPS of $0.75, beating the Street by $0.03. The company provided earnings per share guidance of $3.10-3.20 for the period, compared to the Thomson Reuters consensus earnings per share estimate of $3.43, Analyst Ratings Net reports.
For fiscal year 2016, the company expects domestic protein production (chicken, beef, pork and turkey) to rise by about 3% year-over-year.
Further, the company noted that synergy capture from the integration of Hillshire Brands was going extremely well and it was now on track to achieve synergies of about $300 million in fiscal 2015, up from the prior expectation for savings of $250 million.
CEO Donnie Smith said, “We’ve positioned ourselves well for fiscal 2016 and we’re confident in our ability to achieve at least 10% annual EPS growth over time”. Tyson also expects higher feed costs in the next fiscal year.
TSN shut Friday’s transaction at usd44.35.
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Tyson reports that its beef segment saw an 8 percent decrease in the third quarter, driving up the price of cattle and causing issues for the export market, reports Myles Udland for Business Insider.
