Tyson reports short-term challenges
Tyson Foods Inc. said it is experiencing short-term challenges that are negatively affecting fourth quarter earnings. These challenges include margin compression related to a reversal of a gain on mark to market grain derivatives recognized in our third quarter, commodity market volatility, implementation of enhanced food safety initiatives, a beef processing plant fire, and slower than expected operational improvements in the Chicken segment. As a result, the company is revising its fiscal 2019 adjusted earnings guidance to a range of $5.30 to $5.70 per share and will continue to monitor potentially adverse mark-to-market movements and other volatilities.
“The discrete challenges we’ve encountered this quarter now lead us to believe we will fall short of our previously stated guidance,” said Noel White, Tyson Foods’ president and CEO, “but our outlook for fiscal 2020 remains positive as we believe some of the challenges we’re experiencing are not expected to repeat, and we’re expecting more favorable market conditions as well.
“Our portfolio is structurally sound and generating strong sales volumes. Our volumes are strong in the back-to-school season while our case-ready beef and pork business continues to grow. Our international business is exceeding expectations as our legacy business outperforms the prior year and we continue to integrate Keystone and the newly acquired Thai and European assets.
“Our diversified portfolio is uniquely suited to respond to dynamic and challenging market conditions, and we continue to expect better performance in fiscal 2020. We’re very optimistic about our long-term potential as we focus on prepared foods growth, international growth and serving our customers.”
Source: Tyson Foods Inc.