- $4 reported fiscal second-quarter earnings on Monday that slid 14.5% year-over-year as the
coronavirus tore into meat producers. - The company expects volume to decline year-over-year in the second half of 2020 as factories close and foodservice demand plummets.
- The firm's stock plunged as much as 9.5% in Monday trading.
- Tyson has converted some of its business from foodservice to retail production, though it warned the boost in
grocery demand didn't offset losses in its restaurant segment. - $4.
$4 on Monday issued its fiscal second-quarter report that showed profits sliding, and forecast a volume decline lasting through 2020.
The meat producer's earnings dipped 14.5% year-over-year as the coronavirus pandemic dragged on demand and forced the closure of some factories. Overall sales jumped from the year-ago period by 4.3% alongside a 2.6% climb in net volume.
The company's stock tumbled as much as 9.5% in Monday's session.
Here are the key numbers:
Revenue: $10.89 billion, up 4.3% year-over-year
Earnings per share: $1, versus $1.17 in the year-ago period
Sales volume growth: 2.6%, versus 11.6% in the year-ago period
Operating margin: 4.6%, versus 6.1% in the year-ago period
Read more: $4
Analyst estimates varied widely due to uncertainties surrounding the virus and its effect on factory operations.
Tyson saw hundreds of its workers test positive for COVID-19 through the three-month period, forcing it to temporarily close factories and slow production. The firm recently warned "millions of pounds of meat" will be cut out of its supply chain if closures continue, and that the decline will trickle down to farmers not having customers for their livestock.
"Operationally, we have and expect to continue to face slowdowns and temporary idling of production facilities from team member shortages or choices we make to ensure operational safety," the company said in its report. "The lower levels of productivity and higher costs of production we have experienced will likely continue in the short term until the effects of COVID-19 diminish."
Year-over-year volume is expected to turn negative in the second half of 2020, the company added in an analyst call.
Several of the company's foodservice segments have been converted to retail lines as the company aims to serve soaring demand in grocery stores. While the shift helped push revenue higher, it wasn't enough to offset losses in its foodservice business, Tyson said.
President Trump signed an executive order last week to reopen meat production plants through the Defense Production Act. The order has not yet driven a mass resumption of activity at such facilities, $4 reported Friday.
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