Tyson Foods ($TSN) stock plunged 16% on Monday after the meat company reported a surprise loss in its fiscal second quarter, lowered its forecast for annual revenue, and announced plans to cut jobs.
The company posted a second-quarter adjusted loss of 4 cents per share, well below the 79 cents per share that analysts expected. Earnings a year earlier were $2.29 per share. Sales for the quarter were $13.1 billion, about flat from the year-ago period.
The chicken segment, which accounts for about half of Tyson’s sales, posted an adjusted loss of $166 million for the quarter, compared with a profit of $203 million in the year-earlier quarter.
President and CEO Donnie King said the company was facing a number of challenges, including lower commodity prices for chicken, rising costs for feed, and concerns about avian influenza.”While the current protein market is challenging, we have a strong growth strategy in place and are bullish on our long-term outlook,” King said in a statement.
The earnings report comes as Tyson is facing increasing competition from smaller, regional meatpackers. The company has also been criticized for its environmental record and its treatment of animals.
In late April, The Wall Street Journal reported that Tyson was slashing 15% of its senior leadership positions and 10% of corporate roles. The company said the cuts were necessary to “streamline our operations and become more efficient.”
Tyson’s stock has fallen more than 44% in the past year, and stock is currently undervalued at 41%, given fair value of $103 by Morningstar analyst.
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