Tyson Inc Slides On Weak Profit Warning

Weak Profit Outlook and Departure of CEO Leads Company Shares Down by 14.49%


The shares of America’s biggest meat processor companies posted its biggest drop in eight years during Monday’s trading. The huge decline was led by a profit guidance from Tyson stating that the company would report earnings set to be less than analyst estimates next year. Along with a weak profit outlook reported by the company, Tyson also announced that its current Chief Executive officer Donnie Smith would be leaving the company before the year ends.

Tyson shares which plunged down by 14.49% at Monday’s close got its market value chopped by $2.5 billion less from the stock. Tyson was recently trading up by 26% and gaining up to 56% for the year. The revenue of the company declined down by 13% to $9.16 billion recently compared to analysts forecast of $9.38 billion. Last year, Tyson reported $391 million in profits or earnings of $1.03 per share compared to the reported 63 cents earnings per share of $250 million the year prior to that.

Sales have reportedly dropped to 13% to $9.15 billion led by the decreasing demand for meat products such as chicken, pork, and even beef falling down by 15% in its average price in the most recent quarter. This is also compared to analysts estimate of $9.4 billion.

The company which has recently reported 2016 to be an outstanding fiscal year for the company was followed by the weak profit outlook and news that the company would be placing a new CEO by December 31, 2016.

Smith to Step Down as CEO

Tyson’s widely known Chief Executive Officer Donnie Smith also has been announced that he will be stepping down from his post by December 31, 2016. He is to be replaced by the company’s president Tom Hayes.

Hayes, who originally oversaw the Hillshire Brands, a company acquired by Tyson Foods back in 2014 is set to replace Smith. The current president has already announced his intentions to keep up with the companies. Reportedly, Hayes has been training to replaced Smith as Tyson’s Chief Executive for not less than a year. Despite this, the news was said to be unintentional given the course of the recent events on the company’s weak outlook for their profits in the coming year.

TSN Shares


Half of the news that sent Tyson Food Inc shares down was the company’s expected profits of $4.70 to around $4.85 per share going down beneath analysts expectations of $4.98 per share.

Tyson shares which have been trading in a volatile path for the past weeks dropped down to exactly 14.49% with Monday closing at $57.60 compared to the previous session’s close of $67.36 leading the stock to erase their current market value by $2.5 billion. The RSI indicator also showed that Tyson Shares were oversold with the indicator pointing down sharply below the 30 level.

Despite the weak profit outlook for the coming year, Tyson announced that they intend to invest $1 billion in their efforts to improve overall  production including efforts to advance their food safety, animal welfare and the company’s supply chain. This, however, failed to appease investors as shares of the company dropped to more than 14% at Monday’s close.

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