Tyson Foods Inc. experienced a significant blow to its stock price, with a 6% decline in premarket trading on Monday. The major meat company revealed a net loss of $417 million, or $1.18 per share, for its fiscal third quarter ending July 1. This is in stark contrast to last year's earnings of $750 million, or $2.07 per share.
Although the company's adjusted per-share earnings were estimated at 15 cents, falling short of the FactSet consensus of 26 cents, Tyson Foods faced an additional setback with a decline in sales. Sales dropped by 3%, totaling $13,140 billion compared to last year's figure of $13.495 billion, both below the FactSet consensus of $13.627 billion.
In an effort to streamline operations and cut costs, Tyson Foods closed four chicken facilities during the quarter. However, these closures resulted in impairment charges totaling $448 million - $210 million in its chicken segment and $238 million in international/other.
Moving forward, Chief Executive Donnie King expressed commitment to achieving sustainable growth and margin improvement, acknowledging the challenging market dynamics. The company projects full-year sales to range from $53 billion to $54 billion, while analysts estimate $53.7 billion.
In the year-to-date, Tyson Foods' stock has dropped by 9.3%, while the S&P 500 has gained 17%.
- Net loss of $417 million, or $1.18 per share, in fiscal Q3
- Adjusted per-share earnings at 15 cents versus FactSet consensus of 26 cents
- Sales declined by 3% to $13,140 billion
- Impairment charges of $448 million due to facility closures
Chief Executive Donnie King reaffirms vision for growth and improved margins, despite current market challenges.
- Full-year sales projected between $53 billion and $54 billion
- Analysts estimate full-year sales at $53.7 billion
Stock Market Reaction
Tyson Foods' stock dropped by 6% in premarket trading, following the disappointing financial report.
- Year-to-date decline of 9.3%
- S&P 500 gained 17%