Tyson said beef sales were down 6% from a year ago, and average prices were down 8.5%, due to a drop in US demand © Frederic J Brown/AFP via Getty Images
The largest U.S. meat producer warned of a tough few months ahead as issues such as demand for leaner beef and higher costs, which caused it to miss first-quarter profit expectations, persist.
Tyson Foods on Monday maintained its full-year revenue outlook but cut guidance for operating margins in beef, pork and chicken.
“We see market fluctuations in all businesses, and they are unpredictable and sizeable,” chief executive Donnie King said in the first quarter. “This is the first time I’ve seen all the markets go against us at the same time”, said the analyst in the earnings call.
Chief financial officer John Tyson said the second quarter would be a “softer season” than the first three months of the year, but a recovery was expected in the second half.
Beef segment sales were down 6 percent from a year ago, and average prices were down 8.5 percent, due to lower demand for beef products in the US. King also said there was an increase of about $530 million in the cost of live cattle.
Tyson also produced large quantities of fresh chicken, which eventually had to be reduced to meet demand. Still, sales in the chicken segment rose 10 percent for the quarter with prices rising 7.1 percent.
Overall, revenue rose 2.5 percent from a year ago to $13.26bn in the first quarter but missed Wall Street estimates for $13.52bn.
The Arkansas-based company earned 88 cents per share in the three months to the end of December, which was below market estimates of $1.40 per share and lower than last year’s first-quarter profit of $3.07 per share.
Tyson shares fell 4.3 percent in mid-morning trading on Monday.