Tyson Foods Inc. of Springdale reported fourth-quarter results Monday, and the less-than-expected profit statement caused shares of the company to drop more than 15 percent in early morning trading.
Tyson announced revenue of $9.2 billion in the fourth quarter of 2016, down from $10.5 billion in the same quarter a year ago. Income was $391 million, up from $258 million, and earnings per share rose to $1.03 from 63 cents in the fourth quarter of 2015.
Analysts had expected revenue of nearly $9.4 billion and earnings per share of $1.17. Tyson also revised its EPS expectations of 2017 to between $4.70 and $4.85, while analysts had projected $4.98.
Revenue for fiscal year 2016 dropped to $36.9 billion from $41.4 billion in 2015. Income was up in 2016 to $1.8 billion from $1.2 billion in 2015, and earnings per share also rose, from $2.95 to $4.53.
"Fiscal 2016 was our fourth consecutive year of record results," said Tyson CEO Donnie Smith, who announced he would step down at the end of 2016. "Fourth-quarter results were slightly below our internal expectations."
Sales in all four of Tyson's major segments were down in the quarter and for the fiscal year because of lower demand:
- Chicken was down 10.1 percent to $2.8 billion for the quarter, and down 2.6 percent to $10.9 billion for the year
- Beef was down 7.4 percent to $3.5 billion for the quarter, and down 1.1 percent to $14.5 billion for the year
- Pork was down 6.8 percent to $1.2 billion for the quarter, and down 2.5 percent to $7.3 billion for the year
- Prepared foods was down 4.8 percent to $1.8 billion for quarter, and down 2.8 percent to $7.3 billion for the year.
Smith praised the company's performance, saying it had record years in metrics such as operating income, operating margin and operating cash flow. Tyson repurchased 28 million shares of its stock for $1.7 billion in 2016, and the board of directors announced a quarterly dividend of 22.5 cents on Thursday.
Smith said the first seven weeks of the first quarter of fiscal 2017, which Tyson would report in February, were "phenomenal."
"2016 was a great year, beyond setting records," Smith said. "We made tremendous progress. We are well positioned for even more success in 2017."
President Tom Hayes, who will replace Smith as CEO on Dec. 31, said the company would invest $1 billion for capital expenditures in the next fiscal year. Hayes said the investments would be to continue to build the long-term, sustainable success of Tyson.
"2016 was a great year but more importantly we laid the foundation for 2017 and beyond," Hayes said. "We're capitalizing on our momentum and taking a systematic approach to success."