Tyson Foods (NYSE:TSN) on Monday reported that its fiscal second-quarter net income fell 15% from a year ago, as production disruptions weighed on its results.
The company also said that it has secured a $1.5-billion term loan facility.
Tyson reported fiscal second-quarter net income of $364 million, or $1 per share, down from $426 million, or $1.17 per share, a year earlier.
Excluding items, the meat producer earned 77 cents per share.
Net sales rose 4.3% to $10.89 billion.
Wall Street anticipated earnings per share of $1.04 on revenue of $10.96 billion, based on a survey of analysts. However, it’s difficult to compare reported earnings to analyst estimates for Tyson’s quarter, as the coronavirus pandemic continues to hit global economies and makes earnings impact difficult to assess.
The pandemic has hit Tyson’s business hard, forcing the company to close plants temporarily as hundreds of its workers test positive for COVID-19. As the company weathers the crisis, it is forecasting higher costs of production and lower levels of productivity.
Tyson, based in Springdale, Arkansas, expects volumes to decrease in the second half of 2020 as it predicts lower demand from food service outlets to continue. Higher demand in grocery stores, as consumers switch from eating at restaurants to cooking at home, is not enough to offset weaker food service demand.
Still, Tyson is optimistic that worldwide demand for its meat products will increase over time, despite short-term disruptions stemming from the pandemic.
Shares dipped $2.75, or 4.6%, to $57.25.