Shares of Tyson Foods, Inc. (NYSE:TSN) were falling today after the meat processor reported disappointing third-quarter earnings and said its CEO would step down. As of 11:07 a.m. EST, the stock was down 14.4%.
The world's biggest processor of poultry, pork, and beef said adjusted earnings grew from $0.83 to $0.96, though that was short of the $1.17 analysts expected. Sales adjusted for an extra week in 2015 fell 6.2% to $9.16 billion, missing expectations of $9.38 billion. Partly responsible for the slide in revenue was a planned decrease in chicken production, as the company focuses more on higher-margin products like branded sausages.
Despite the weak results, outgoing CEO Donnie Smith reflected on the company's success in the fiscal year, saying it was the fourth consecutive year of record results.
Separately, the company also announced that Smith would be succeeded as CEO by current president Tom Hayes, who came to the company through its recent acquisition of Hillshire Brands. Smith's leadership guided Tyson stock from a recession-era bottom of $5 to more than $75 earlier this year, propelled by a number of acquisitions and a focus on higher-margin products.
Hayes, the incoming CEO, said fiscal 2017 had gotten off to a good start despite weak fourth-quarter results: "The first seven weeks of fiscal 2017 have been phenomenal as we are off to the best start we have ever experienced." For the current fiscal year, the company projects flat sales due to falling beef prices; it sees adjusted earnings per share of $4.70 to $4.85, or 7% to 10% above 2016's figure, as the company expects to realize ongoing synergies of $675 million from the Hillshire Brands integration.
While the stock's heady years are probably over, it looks like a solid value after today's drop.