Tyson Foods Inc. (NYSE: TSN) reported on Monday its quarterly profits -- aided by a strong demand for beef -- that beat analysts’ estimates. Executives warned, however, that trade disputes were threatening the Company’s pork and chicken sales.
Beijing imposed tariffs on American shipments as part of an ongoing trade war with Washington, which has resulted in China importing less U.S. pork. Mexico and Canada also implemented levies, leading to an oversupply and lower prices for meat in the U.S. market.
According to the Company, lower prices for pork and beef are also reducing demand for Tyson’s chicken. “Tariffs and trade concerns could continue to impact product pricing,” Stewart Glendinning, Tyson’s Chief Financial Officer, told analysts on a conference call.
Operating income for the chicken business in the third quarter dropped to USD 189 Million, from USD 294 Million a year earlier, according to the Company. Operating income for pork was USD 67 Million, down from USD 136 Million last year.
“We are clearly not satisfied with our results...our challenge really comes down to pork and chicken,” Chief Executive Officer Tom Hayes said on the call.
Sales in Tyson’s beef business, however, increased due to higher exports and increased supplies, the Company reported. The unit had a record operating income of USD 318 Million in the quarter, up from USD 147 Million a year earlier.
Net income attributable to the Company rose to USD 541 Million, or USD 1.47 per share, in the quarter, from USD 447 Million, or USD 1.21 per share a year earlier. Analysts on average had expected earnings of USD 1.40 per share on revenue of USD 10.28 Billion. The No. 1 U.S. meat processor reported sales rose 2% to USD 10.05 Billion.