Tyson Foods Inc.'s profit jumped 32% in its latest quarter but
still missed expectations because of weak beef sales, which caused
the company to cut its full-year outlook.
Shares of Tyson fell 8% in premarket trading.
The Arkansas-based company—the largest U.S. meatpacker by
sales—has benefited from its acquisition last year of Jimmy Dean
sausage maker Hillshire Brands Co. Sales in Tyson's prepared-foods
segment doubled in its latest quarter, as sales volume and the
average sales price grew largely due to the Hillshire deal. Growth
in that segment helped offset weakness in others.
Pork sales plunged 32% to $1.21 billion, as sales volume fell
following Tyson's divestiture of its Heinold Hog Markets business.
Chicken sales, meanwhile, declined 2.5% as lower feed-ingredient
costs pressured the average sales price.
International sales dropped 33%, because of the sale of its
Brazil business and weak demand in China. Exports have been
challenged by foreign countries' bans on U.S. poultry purchases
because of avian influenza.
While beef sales rose 2.8% during the period, Tyson said the
business suffered from export-market disruptions and very high
cattle costs.
"Unless beef market conditions improve rapidly," Chief Executive
Donnie Smith said, "we will not achieve our previous guidance" for
the year.
As a result, Tyson reduced its full-year earnings outlook to
$3.10 to $3.20 a share, down from its earlier range of $3.30 to
$3.40. Analysts have expected $3.44 a share, according to Thomson
Reuters.
The company said it now anticipates increased cost savings from
the Hillshire acquisition and lifted that estimate to $300 million
for the 2015 business year. Previously, Tyson expected $250 million
in savings.
In all, for the most-recent quarter, Tyson reported a profit of
$343 million, up from $260 million a year earlier. On a per-share
basis, earnings rose to 83 cents from 73 cents. Revenue increased
4% to $10.07 billion.
Analysts projected 92 cents in earnings per share on $10.3
billion in revenue, according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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