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The "Shorts" Are Getting In the Black Range

Econ101

Well-known member
UPDATE: Tyson Foods Sees 2Q Loss, Cuts 2006 View



Excite Money & Investing

April 19, 2006



SPRINGDALE, Ark. (AP)--Poultry producer and meat processor Tyson Foods Inc. (TSN) ( TSN) on Wednesday forecast a wider-than-expected loss in the second quarter and cut its full-year guidance, saying bird flu fears have hurt chicken demand.



The company said avian influenza fears have reduced international demand for its products, and led to a glut in its inventory, which has pressured prices. Meanwhile, the company also noted that cattle supplies are on the increase, and prices are declining and pressuring margins.



Tyson shares slid 6.6%, or 87 cents, to $12.40 in after-market trading, after closing down 7 cents at $13.27 on the New York Stock Exchange.



The company said it expects a loss of 38 cents per share in the second quarter, including an 8-cent-per-share charge for the closing of two Nebraska beef plants and a 3-cent charge for closing two Iowa processed meats facilities.



Wall Street analysts expect the company to post an 11-cent-per-share loss in the quarter, according to Thomson First Call



The company also reduced its fiscal 2006 guidance, to a range of a 25-cent loss to a 10-cent profit per share. In February, the company had projected full- year earnings of 50 cents to 80 cents per share. Analysts expected the Springdale, Ark., company to earn 42 cents per share.



Tyson also said that markets which had been closed to U.S. products due to mad cow concerns, including South Korea and Japan, are still not open. The company said it is not certain when either market will reopen, and warned it expects improvements in the beef segment in the second half, though not at the level previously forecast.



The company is slated to report final second-quarter results on May 1.



Source: Dow Jones Newswires

money.excite.com



Tyson Foods Results Hit by Bird Flu



Food Ingredients First



Apr 20,2006-Tyson said that the discovery of H5N1 avian influenza in other parts of the world has reduced U.S. chicken export prices more than expected. Unprecedented leg quarter inventories have delayed the recovery of these export prices.



20/04/06 Tyson Foods the world’s largest processor and marketer of chicken, beef, and pork has reported preliminary second quarter 2006 results and substantially reduced earnings guidance for fiscal 2006. Volatile markets and the continued oversupply of all proteins contributed to the significant deterioration of chicken and beef margins during the second quarter of fiscal 2006 and resulted in a preliminary GAAP loss of approximately $(0.38) per diluted share in the second quarter and a preliminary GAAP loss of approximately $(0.27) per diluted share for the first half of the fiscal year. The preliminary second quarter results include an $0.08 per share charge for the recent closing of two Nebraska beef plants and a $0.03 per share charge for the closing of two Iowa processed meats facilities.



Tyson said that this oversupply across all proteins and a forecasted lack of price recovery for the remainder of the fiscal year has prompted the company to significantly reduce its fiscal 2006 GAAP earnings guidance to a range of $(0.25) to $0.10 per diluted share. This estimate also includes the charges relating to the plant closings in Nebraska and Iowa.



The discovery of H5N1 avian influenza in other parts of the world has reduced U.S. chicken export prices more than expected. 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.



Cattle supplies are gradually increasing and cattle prices are declining, however, box beef prices are also declining, putting continued pressure on beef margins. Key beef export markets have remained inaccessible longer than anticipated. South Korea, which many expected to reopen to U.S. beef in early spring, is still closed. The Japanese market opened briefly then reinstituted a U.S. beef ban. It is uncertain when either of these markets will reopen. Improvements in the beef segment are still expected in the last half of fiscal 2006, but not at the level previously forecasted.



Tyson’s pork operations also continue to be challenged by the abundance of competing proteins in the marketplace. Meanwhile, the company has also been negatively affected by increased corn and diesel fuel expenses.



“While we expected tough and uncertain conditions in the protein market, it has been far more difficult than we previously projected,” said John Tyson, Tyson chairman and CEO. “Protein supplies have remained more burdensome than anticipated and will continue to put pressure on product price recovery. We still expect an improved performance in the last half of fiscal 2006; however it will not be of the magnitude originally projected. Despite these challenging conditions, we remain confident in our business strategy to create more value-added products, improve operational efficiencies and expand our international presence.”



foodingredientsfirst.com
 

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