estimated a steep fiscal second-quarter loss and again slashed its earnings forecast for 2006, citing an oversupply of products on the market and weak prices.
The company put its loss for the March quarter at 38 cents a share, including 11 cents a share in charges related to plant closings. Analysts polled by Thomson First Call project a loss of 11 cents a share.
For the full fiscal year, the company now sees bottom-line results ranging from a loss of 25 cents a share to earnings of 10 cents a share, including the charges. In February, Tyson predicted a profit of 42 cents to 70 cents a share, which was cut from an earlier projection.
"The discovery of H5N1 avian influenza in other parts of the world has reduced U.S. chicken export prices more than expected," the company said in a press release Wednesday. "Unprecedented leg quarter inventories have delayed the recovery of these export prices. It has also put pressure on an overabundant, domestic white meat market, and subsequently contributed to historically low breast meat prices."
On the beef side, Tyson said cattle supplies are gradually increasing and prices are declining, but lower box beef prices are also falling, putting pressure on beef margins. In addition, Asian markets with U.S. beef bans have hurt results.
"While we expected tough and uncertain conditions in the protein market, it has been far more difficult than we previously projected," said John Tyson, chairman and CEO, in the release. "Protein supplies have remained more burdensome than anticipated and will continue to put pressure on product price recovery.
Tyson shares sank 79 cents, or 6%, to $12.48 in late trading.