Tyson Foods Cuts 500 Jobs, Misses Quarterly Sales Estimates
Tyson Foods Inc is cutting 500 jobs as part of a restructuring programme, as the business reported quarterly sales that fell short of analysts' estimates.
Tyson launched the restructuring program as it competes with other global meat companies to supply products to China, the world's largest pork consumer.
African swine fever has decimated the Chinese herd, raising the need for meat imports. Tyson is also seeking to benefit from a pledge by Beijing to boost the import of American farm goods as part of an initial trade deal.
The company eliminated positions across several areas and job levels, resulting in a $44 million pretax charge related to severance pay and other employee-related costs, according to a regulatory filing.
Most of the positions were in corporate offices in Chicago and Springdale, Arkansas, where Tyson is based, the filing said.
Net income attributable to Tyson rose to $557 million (€506.5 million), or $1.52 per share, in the first quarter ended on Dec. 28, from $551 million, or $1.50 per share, a year earlier.
Sales rose 6.1% to $10.82 billion (€9.84 billion), but fell short of analysts' estimates of $11.04 billion (€10.04 billion), according to IBES data from Refinitiv. Excluding items, the company earned $1.66 per share, in line with expectations.
'Reasons To Be Optimistic'
"With improved access to global markets resulting from recent trade developments, there are reasons to be optimistic about fiscal 2020," said Noel White, Tyson chief executive officer.
A fire that temporarily closed a Tyson beef slaughterhouse in Kansas last year curtailed its meat processing operations and left restaurants, food service companies and grocery chains scrambling for beef.
Tyson's beef sales volume fell 8% in the first quarter.