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Lowered Forecast Pounds Tyson

Shares tumble 10% after the meat producer says it had a tough fourth quarter.
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Tyson (TSN) - Get Report shares tumbled 10% Wednesday after the meat producer chopped its earnings forecast, citing a tougher-than-expected fourth quarter.

The Springdale, Ark., company said it expects earnings of 72 cents to 80 cents a share for the year ending this month. Just slightly over a month ago, Tyson had lifted its full-year forecast to 82 cents to 92 cents a share from a prior view of 65 cents to 90 cents.

Analysts currently have an average estimate for earnings of 88 cents a share, according to Thomson Financial.

"The fourth quarter is turning out to be more challenging than expected," said President and CEO Richard Bond. "Our beef business has been affected by higher than expected live cattle costs and a decline in beef revenues due to a disruption in South Korean beef trade. Meanwhile, live hog prices were higher due to speculation about Chinese pork imports."

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He added that sales volumes at the company's chicken business fell because of price increases implemented earlier in the year.

Tyson has been working on a turnaround throughout the fiscal year after being slammed last year by a glut of chicken products and pricing pressures in the beef market. The company said Wednesday that it has made "strong progress" in 2007 as it cut costs by closing plants and reducing expenses.

Shares of Tyson recently were down $2.25 to $19.76.