What happened
Shares of Tyson Foods (NYSE: TSN) were getting chewed up today after the meat-processing giant posted another round of disappointing quarterly results.
At 10:48 a.m., the stock was down 7.2%.
So what
Tyson continued to struggle with lower protein prices and higher costs, continuing a pattern from earlier in the year.
Revenue in the fiscal third quarter fell 2.6% to $13.1 billion, missing estimates at $13.6 billion. Both volume challenges and price declines weighed on the stock, as pork prices were down 16% and chicken prices fell 5.5%.
The company also said it would close four chicken facilities in an attempt to lower costs, improve capacity use, and ultimately grow profits.
Tyson also took $448 million in total goodwill impairment charges in the quarter, including $210 million in the chicken segment and $238 million in international/other.
With prices falling, margins continued, and it reported an operating loss in pork and chicken, but strength in prepared foods helped it turn in an adjusted operating profit of $179 million for the quarter, down from $998 million a year ago.
On the bottom line, adjusted earnings per share were down from $1.94 to $0.15, missing estimates at $0.26.
CEO Donnie King said, "While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top-line growth and margin improvement."
Now what
Looking ahead, the company maintained its revenue guidance of $53 billion to $54 billion. It continues to expect approximately flat adjusted operating margins in beef and chicken but lowered its guidance in pork, calling for an adjusted loss of 2% to 4%.
Tyson should eventually emerge from its current woes with the help of plant closures and as industry pricing stabilizes, but it's not surprising to see the stock falling again, with profits down sharply from a year ago.
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