Dive Brief:
- Tyson Foods announced its fourth quarter and full-year 2016 earnings results, including a 12.8% decline in quarterly revenue to $9.16 billion, according to the company's earnings news release.
- Quarterly net income rose to $391 million, or $1.03 per share, from $258 million, or $0.63 per share, the year before.
- The company also announced that CEO Donnie Smith will step down from his position as of Dec. 31. Current company president Tom Hayes will succeed him and is appointed to the board of directors effective immediately.
Dive Insight:
Tyson's share price fell by more than 9% in premarket trading Monday following the two announcements. The plunge suggests that investors may not feel confident in the company's direction and most recent headlines, even though Tyson reported record earnings per share, operating profit and operating margin for fiscal year 2016.
Tyson's fourth-quarter revenue fell short of Wall Street expectations due to less-than-expected beef, pork and prepared foods sales, though retail sales volumes for Tyson's Core 9 product lines increased. Tyson remains positive about the company's performance; Smith said in a statement that Tyson is "growing where we want to grow by selling more branded, higher margin products."
Still, those financial numbers may not do much to assuage shareholders' concerns about a pending class action lawsuit and claims of price manipulation and coercion by Tyson and other companies. Another poultry processor accused Tyson and other companies of sharing supply information in a way that could artificially increase chicken prices, and therefore profits. The now infamous Georgia Dock pricing index has been at the heart of the argument.