Tyson Foods Inc., the largest U.S. meat processor, cut its full-year sales forecast and said profit will be lower after the cost of animal feed rose because of the country’s drought. The shares fell the most in more than three years.
Revenue will be $33 billion in the year through September, compared with a previous prediction of $34 billion, the Springdale, Arkansas-based company said today in a statement. The average of 13 analysts’ estimates compiled by Bloomberg is for $34 billion. Tyson didn’t give a specific forecast for full-year earnings. It said in May that profit might be $2 a share.
“Our beef and pork segments have been operating in very difficult market conditions that will result in our earnings for fiscal 2012 coming in lower than we previously projected,” Chief Executive Officer Donnie Smith said in the statement. “While we ultimately expect to pass along rising input costs, these costs, coupled with continued soft demand, are likely to pressure earnings in 2013.”
Corn prices jumped to a record in Chicago trading on July 31 as hot weather scorched the U.S. Midwest. Parts of Iowa and Illinois, the country’s largest corn and soybean growers, had less than 25 percent of normal rain in the past 30 days, National Weather Service data show. Only 24 percent of corn was in good or excellent condition July 29, according to the U.S. Department of Agriculture, which updates its crop ratings today.
Tyson dropped 7.9 percent to $14.17 at the close in New York, the biggest drop since July 20, 2009. Tim Ramey, an analyst at D.A. Davidson & Co. in Lake Oswego, Oregon, today cut his rating on Tyson to hold from buy.
Tyson’s net income fell to $76 million, or 21 cents a share, in the three months through June 30, from $196 million, or 51 cents, a year earlier. Profit excluding a debt-extinguishment charge was 50 cents a share, trailing the 54-cent average of 13 estimates. Sales rose 0.7 percent to $8.31 billion, missing the $8.71 billion average of 12 estimates.