NEW YORK (AP) — Tyson Foods' third-quarter-profit leapt 32 percent, but that was still short of expectations and the company cut its outlook with high cattle costs expected to continue to weigh on revenue growth.
"Unless beef market conditions improve rapidly, we will not achieve our previous guidance," CEO Donnie Smith said Monday.
Tyson is also being hammered on exports with bans in some countries following a U.S. outbreak avian influenza, as well as a strong dollar.
Company shares slid 9 percent in early trading.
Net income for the quarter reached $343 million, or 83 cents per share. Earnings, adjusted for non-recurring gains, came to 80 cents per share.
That was 15 cents shy of what industry analysts had expected, according to a poll by Zacks Investment Research.
Revenue rose 4 percent to $10.07 billion and sales volume for the prepared foods unit climbed, thanks in part to the acquisition of Hillshire Brands last August.
But, the beef business overshadowed those numbers.
Smith said beef "under-delivered our expectations by $84 million," in a conference call Monday. There was also an excess of beef on the market, forcing sales at lower prices, and a labor dispute at West Coast ports also disrupted business, Smith said.
The Springdale, Arizona, company warned that the conditions would make it difficult to meet prior full-year guidance of $3.30 to $3.40 per share. The company cut its outlook to between $3.10 and $3.20 per share.
Shares of Tyson Foods Inc., which have risen 11 percent since the beginning of the year, fell $3.60 to $40.75.