Shares of Pilgrim's Pride (PPC - Get Report) were among the NYSE's losers Tuesday, dropping 21% after the poultry company slashed its fiscal first-quarter earnings estimate and announced a restructuring of its turkey division.
Pilgrim's Pride lowered its earnings projection for the December quarter to 36 cents to 41 cents a share from a prior forecast of 75 cents to 85 cents. Analysts polled by Thomson First Call had an average estimate for earnings of 82 cents a share. The company attributed the weak results to a significantly worse-than-expected performance in Mexico and lower sales prices on chicken leg quarters. The company also withdrew its guidance for the rest of fiscal 2006.
Pilgrim's Pride's first-quarter guidance excludes a one-time tax gain related to its Mexico operations and the restructuring of its turkey division. The company plans to stop production of ground turkey and cooked deli turkey breast meat at its Franconia, Pa., plant. The move is expected to help pretax earnings by $10 million to $15 million a year, and will result in about 300 job cuts. Shares of Pilgrim's Pride recently were down $6.90 to $26.26.
Shares of Engelhard (EC - Get Report) shot up 22% after the German chemical company BASF (BF) went public with an offer to buy the New Jersey-based supplier of surface and materials products for $4.9 billion. BASF proposed buying Engelhard for $37 a share, a 23% premium over Friday's closing price of $30.15. BASF said it has made efforts for a "friendly transaction," but Engelhard has rebuffed attempts at talks with the company. BASF also said it may raise its offer by $1 a share if it can find value beyond publicly available information. Shares of Engelhard recently were up $6.51 to $36.66.In the first day of trading following the split of media behemoth Viacom (VIA - Get Report), shares of CBS (CBS - Get Report) and the company retaining the Viacom name were trading up. The new CBS company includes the CBS television network, UPN, Paramount television and Viacom's outdoor advertising businesses. Viacom includes MTV Networks and Paramount Pictures. Viacom shares were up 69 cents, or 1.7%, to $40.69, while CBS shares jumped $1.80, or 7%, to $27.30.