Tyson Foods (NYSE:TSN), the largest U.S. meat processor, said net income for the fiscal second quarter almost halved, lagging forecasts, as consumers shifted to cheaper chicken products from beef, and the company trimmed its sales projection for the full fiscal year. Shares fell in early trading.
Net income for the three months that ended March 30 dropped 43 percent to $95 million, or 26 cents a share, from $166 million, or 44 cents a share, in the year-earlier period, the Springdale, Arkansas-based company said in a statement on Monday. On an adjusted basis, the company's net income fell to 36 cents a share.
Sales for the January-March period rose 2 percent to $8.42 billion.
Analysts were modeling earnings of 45 cents a share on $8.58 billion in revenue.
Chicken volumes rose 0.1 percent in the January-March period, but beef volumes slumped 3.9 percent, pork 2.2 percent and packaged foods 0.8 percent.
"Our beef segment suffered margin compression as consumers opted for the relative value of chicken," the company said, citing Chief Executive Donnie Smith.
Looking ahead, Tyson anticipated sales for fiscal 2013 to be $34.5 billion, down from its previous projeciton of $35 billion. Analysts on average predicted $34.49 billion, according to Thomson Reuters. "I'm still confident our results for 2013 will be better than 2012," Smith said in the statement.
Tyson shares tumbled 5 percent to $23.67 in pre-market trading in New York on Monday. The stock gained gained 29 percent this year through May 3, outpacing the benchmark S&P 500 Index (INDEXSP:.INX), which gained 13 percent in the period.