May 5 2014, 12:52pm CDT | by Forbes
Somebody call Chicken Little: the sky is falling at Tyson Foods.
That profit has actually more than doubled from a year ago, as overall sales improved 7.7%. But Wall Street got nervous when Tyson CEO Donnie Smith cited the weather as one of the main factors affecting chicken sales, which grew in volume at a 4.3% clip, but saw a slight drop in average price.
“Winter weather affected us in several ways, some positive, some negative,” Smith said in a conference call. “Although we saw a dip in our sales to school cafeterias from weather-related closings, we saw an increase in our retail sales because mom went to the grocery stores, stocked up on chicken strips when she heard another round of bad weather was coming.”
Meanwhile, Tyson said it expects full year earnings of $2.78 per share, 15 cents less than what Wall Street expected. Part of that caution comes from the Porcine Epidemic Diarrhea virus spreading through US farms. Tyson warned domestic meat production could fall about 1% this year, with 4% fewer pigs going to market due to the virus.
“Going forward, the big if for us is what’s going to happen with pork,” said Smith.
International sales volume, the smallest part of Tyson’s business, grew at the fastest rate. But it was also the only segment where Tyson had negative operating margin.
Prior to today, Tyson shares were up nearly 27.5% year to date, and over 72% in the last year.
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