Tyson Foods Inc missed Wall Street estimates for quarterly profit on Monday, as the biggest U.S. meat processor felt the brunt of higher freight and labor costs, sending its shares down nearly 6 percent in premarket trading.
Tyson, like other U.S. meat processing and packaged food companies, has been facing higher transportation costs as railroads and truck fleets have raised prices amid a shortage of drivers, reduced capacity, higher fuel prices and a strengthening U.S. economy.
Commodity Price Increases
The maker of Ball Park hotdogs and Jimmy Dean sausages is also facing higher feed costs as prices of commodities like soybean and corn increase. It expects chicken feed costs to rise by about $100 million in fiscal 2018.
Tyson also lowered its fiscal 2018 sales forecast range by $1 billion to between $40 billion and $41 billion
For the second quarter ended March 31, net income attributable to the company fell to $315 million, or 85 cents per share, from $340 million, or 92 cents per share, a year earlier.
The company paid $109 million in one time cash bonuses to its employees across its businesses as it passed on the benefits on of the changes in the U.S. tax code.
Excluding certain items, the company earned $1.27 per share, while revenue rose 7.6 percent to $9.77 billion.
Analysts on average had expected earnings of $1.30 per share on revenue of $9.89 billion, according to Thomson Reuters I/B/E/S.