February 16, 2006
Tyson to consolidate beef operations in western US
Tyson Foods will close plants two beef plants in Nebraska this week, affecting about 1,665 plant workers, or 1.5 percent of the company's work force.
The meat and poultry processor expects the restructuring to cut second-quarter earnings by US$46 million, or 8 cents a share, and cut its fiscal 2006 earnings view to a range of 42 cents to 72 cents a share.
For Q2, Wall Street expects a loss of 3 cents a share, excluding items. In the year-earlier second quarter, the company earned US$76 million, or 21 cents a share.
In January, the company cut its 2006 earnings guidance to a range of 50 cents to 80 cents a share due to lower-than-expected cattle supplies and unanticipated interruptions in export market access that will slow the beef recovery expected later in the year.
Tyson said it will close a beef processing plant in Norfolk and a beef slaughter plant in West Point. Production will be moved to the company's beef plant in Dakota City, Nebraska, which is being expanded.
The company expects the plant closings to generate annual pre-tax savings of about US$40 million, some of which will be generated in the last six months of the current fiscal year.
The company said the affected workers will be asked to transfer to other plants and will be offered relocation incentives. According to the company's Web site, Tyson employs about 114,000 workers.