MILWAUKEE (AP) -- Shares of Tyson Foods Inc. tumbled Monday after the world's largest meat processor said President and Chief Executive Dick Bond will step down effective immediately.
Shares fell 95 cents, or 10 percent, to $8.40 in midday trading Monday.
The Springdale, Ark.-based producer of chicken, beef and pork said Bond, who had served as CEO since May 2006, will be replaced on an interim basis by former chairman and CEO Leland Tollett, until a permanent replacement is found.
Tyson's earnings plunged in 2008 on weakness in its chicken business, with shares finishing the year down 42 percent. Last month, Tyson signed an agreement with its creditors that puts up just about the entire company as collateral for its loans.
The company, like others in its industry, has struggled in the past year as high costs for key ingredients such corn and oil hurt profits for the nation's meat makers, especially for the thin-margin chicken business. Those prices have come off their record highs and those effects are slowly being felt. But also hurting the industry is weak pricing, due to a drop in demand from foodservice customers and an oversupply of meat on the market, which dampens prices. Others in the industry have pledged to cut production to shore up prices, but Tyson has not yet announced a cut in chicken production.
For the fiscal year, which ended Sept. 27, Tyson earned $86 million, or 24 cents per share, down sharply from $268 million, or 75 cents per share, the previous year. Sales rose to $26.86 billion from $25.73 billion.
Stephens Inc. analyst Farha Aslam said in a note to clients he doesn't believe Bond's departure is related to near-term earnings or his outlook for the protein commodity markets. While he said the change is a "slight negative" for Tyson's stock, given Bond's credibility with investors and focus on cost savings, he thinks Tollett will be able to take over fairly quickly.
Aslam also said Donnie Smith's appointment as senior group vice president of poultry and prepared foods, with overall responsibility for Tyson's chicken businesses, establishes a clearer management structure and should facilitate faster decision-making.