Springdale, AR - Tyson Foods, Inc., fresh from reporting a fiscal fourth quarter loss on Monday, said the loss was due to charges against earnings that it took as part of plans to refocus on its core chicken operations.
The No. 1 U.S. poultry processor said it lost $89.7 million or 39 cents a share in the quarter ended Oct. 3, and that the charges amounted to $214.6 million. (Corrects charge). In the year-earlier quarter, the company earned $47.7 million or 22 cents a share.
As part of the restructuring plan, Tyson closed eight plants and feedmills, reduced its work force by an unspecified amount and wrote down excess investments and certain assets.
Tyson said its strategic refocusing will save it about $12 to $15 million a year. It also said that before the charges, earnings were $65.1 million or 28 cents a share, which met analysts' expectations for the quarter.
The company's stock was down 6 cents to $22.50 in New York Stock Exchange trade ahead of the close.
The company, which also may sell or revamp its seafood operations, said the 24.5 percent increase in fourth quarter sales to $2 billion was due to its acquisition of Hudson Foods early this year, and to retail price increases on poultry products. Hudson was the country's fifth largest poultry producer until it was hammered by an E-coli bacteria scare involving its beef operations in 1997.
The $214.6 million charges include $142.2 million in asset impairment charges, $48 million in currency losses with its Russian export business and another $24 million for severance payments. (Corrects main figure).
In a statement, Tyson cast doubts on its export business, but said lower grain costs and favorable domestic demand for pricing and chicken should position the company for the next fiscal year and beyond.
Just this month, J.P. Morgan cut Tyson to a long-term buy from a buy rating. Merrill Lynch was bullish on the company's intermediate term raising it to a buy from an accumulate rating, citing improved margins on lower feed costs.
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