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Tyson Foods Cuts Outlook, Dragging Down S&P 500 as Worst Performer

8/03/15 5:04 PM EDT
Shares of Tyson Foods (TSN) tumbled to finish Monday's regular trading session as the worst performing S&P 500 component after cutting its full year profit forecast. The largest U.S. meat processor slashed its 2015 earnings outlook, citing weaker beef sales. Tyson reduced its earnings forecast by 20 cents on both the low and high end to a range of between $3.10 to $3.20 a share. The consensus estimate is for full year earnings of $3.44 a share. Tyson said its prepared foods and chicken segments performed in the period, but the positive results were partly offset by weak numbers from its beef and pork segments. Sales of prepared foods increased 13.2% due to the acquisition of Hillshire Brands, which Tyson Foods bought last year for $8.55 billion. Beef sales volume decreased 3.9% as less cattle was processed, while sales price grew 6.9% due to a decline in beef supplies. Tyson president and CEO Donnie Smith said the company’s earnings results were affected by high cattle costs as well as charges relates to export issues. Still, the company lowered its debt by $688 million during the quarter and said it plans to launch a share repurchase program in the current quarter. Tyson also said it's on track to save about $300 million in synergy costs during the 2015 fiscal year. In its latest quarter, the company missed estimates on both the top and bottom line, as well as cut its full year profit outlook. Tyson posted a profit of $0.80 a share, sharply missing expectations by more than a dime. The company raked in revenue of $10.07 billion, also below analysts' expectations of $10.3 billion, according to Thomson Reuters data. TheStreet’s Kurumi Fukushima reports in New York.
Stocks in this video: TSN
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