Tyson Foods Inc. (NYSE:TSN) posted disappointing results for earnings and revenue for the fourth quarter of its fiscal year. For its fourth quarter, which ended in October, Tyson posted a profit of $391 million, or $1.03 a share, up from $258 million, or 63 cents a share, a year earlier. Excluding certain items, earnings were 96 cents a share, up from 83 cents. Analysts had forecast per-share earnings of $1.17.
Revenue dropped 13 percent to $9.16 billion, lower than the $9.38 billion projected by analysts. Total volume fell 1.1 percent, with chicken volume down 3.2 percent. Shares of Tyson dropped sharply after the announcement, falling 15 percent to $57.27 in early trading. The company’s stock has climbed 54 percent in the past 12 months through Friday’s close.
Tyson has been looking to sell more branded prepared foods, such as pre-seasoned products, marinated meats and heat-and-serve meals, which command higher margins. The company will also work to sell more products in developing markets and expand product categories. The Hillshire brands have been a major focus of the company’s future growth. In 2014, Tyson acquired Hillshire Brands Co., maker of Jimmy Dean sausages and Ball Park hot dogs, in a $7.7 billion deal. The deal gave the company a portfolio of brands that far exceeded Tyson’s existing offerings.
The company gave a downbeat outlook for profit in the year ahead. For its year that began in October, the company said it expects earnings in a range of $4.70 to $4.85, lower than the $4.98 projected by analysts polled by Thomson Reuters. The company plans to invest about $1 billion into the business in the year ahead.
Tyson also announced that Chief Executive Donnie Smith would be leaving the company. Mr. Smith also informed the board of his intent to resign as a director. Smith will stay on in an advisory role for three years after he steps down on Dec. 31.
Mr. Smith, who became CEO in November 2009, will be replaced by President Tom Hayes, who will also keep the role of president. The board’s decision of Mr. Hayes was based on his record and “how his skills align with the company’s strategic direction,” according to a statement from Chairman John Tyson. Mr. Hayes previously oversaw all of Tyson’s North American sales as chief commercial officer. According to a Monday regulatory filing, Tyson added Mr. Hayes to the board last week, increasing its size to 10 members.