August 5, 2015

Tyson sees slowest sales growth due to US port disruptions

US port disruptions in the American West Coast had delayed Tyson Foods' meat shipments which were later rejected by overseas customers. This led to the company's slowest sales growth in nine quarters as it implemented price cuts to clear its burgeoning inventory.

As a result, Tyson suffered a dent in margins for the third quarter, said Donnie Smith, the chief executive of the company. He added that following the resumption of operations at West Coast ports, buyers in Asia dealt with a flood of inbound deliveries after having imported meat from other countries.

In the second quarter, losses in Tyson's beef business, which is worth about 24% of its 2014's operating profit, led to a lower-than-expected profit for the April to June period. Sales dropped 3.9% in the period and an operating loss of US$7 million was posted.

Still, Tyson's overall sales rose 4% to US$10.07 billion in the second quarter, with growth at more than 10% in the last four quarters due to high beef prices.

The company had also revised its full-year adjusted earnings, from US$3.30 -- US$3.40 per share, down to a range of US$3.10 - US$3.20, Reuters reported. Net income attributable was US$343 million in the third quarter, a rise of 32%.