Tyson cuts profit forecast, says slaughterhouse fire among challenges
Reuters
Published Sep 03, 2019 05:04PM ET
Tyson cuts profit forecast, says slaughterhouse fire among challenges
(Reuters) - U.S. meat processor Tyson Foods Inc (N:TSN) on Tuesday lowered its 2019 adjusted earnings forecast citing short-term challenges due to commodity market volatility, slower-than-expected operational improvements in the chicken segment, and the impact of a recent fire at its slaughterhouse in Holcomb.
Tyson now expects to earn an adjusted profit between $5.30 and $5.70 per share, from a prior outlook of $5.75 to $6.10 per share.
The company's shares fell about 6% in after market trading.
Tyson said challenges also include margin compression related to a reversal of a gain on mark-to-market grain derivatives recognized in the third quarter, and implementation of enhanced food safety initiatives.
"The discrete challenges we've encountered this quarter now lead us to believe we will fall short of our previously stated guidance," Noel White, Tyson Foods' Chief Executive Officer said.
However, he added Tyson's outlook for fiscal 2020 remains positive, as it does not expect the challenges to repeat and expects more favorable market conditions.
The slaughterhouse fire https://www.reuters.com/article/us-tyson-foods-fire/tyson-foods-slaughterhouse-fire-ignites-u-s-beef-prices-idUSKCN1V61WT last month led to the closure of the sprawling facility in Holcomb, Kansas, that killed about 6,000 cattle a day, or 5% of the total U.S. slaughter.
The Springdale, Arkansas-based company said it would rebuild the Kansas beef plant.
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Written By: Reuters
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