(Reuters) - Tyson Foods Inc (TSN.N) reported quarterly sales on Tuesday that missed Wall Street estimates, as the top U.S. meat processor was hit by lower demand for chicken, sending shares down nearly 7 percent.
Shares of the Ball Park hotdogs and Jimmy Dean sausages maker fell $4.11, or 6.7 percent, to $57.50 in late morning trading.
Demand for chicken has eased in the United States as President Donald Trump’s trade wars resulted in lower exports of U.S. beef and pork to China and Mexico, boosting the domestic supply of the competing meats.
The U.S.-China trade war has all but halted shipments of many American agricultural goods to China, including meat and soybeans.
“We are not currently shipping product to China - beef, pork or poultry,” said new Chief Executive Noel White. “So if there is any change, that would provide upside export potential for us.”
Tyson also said in a filing that the various trade disputes have affected chicken and pork prices. It said the company will counter increased costs through pricing.
Sales in the company’s chicken business rose 2.6 percent, but that was primarily due to acquisitions, including of Tecumseh Poultry and its Smart Chicken brand. Operating income from chicken fell nearly 34 percent from a year earlier. Beef operating income was up about 14 percent.
White, who was named Tyson CEO on Sept. 17 after Tom Hayes stepped down for personal reasons, said chicken sales suffered as restaurants promoted beef instead.
He added that Tyson could benefit in 2019 if the food service industry more heavily promotes chicken.
Higher freight costs and some poultry production issues, including a fire at one of the companies facilities, also hit Tyson’s chicken business, White said.
Overall, sales fell 1.4 percent to $10 billion. Analysts on average had expected revenue of $10.26 billion, according to IBES data from Refinitiv.
Excluding items, the company earned $1.58 per share, easily beating analysts’ expectations of $1.35.
Net income attributable to the company rose to $537 million, or $1.47 per share, in the fourth quarter ended Sept. 29, from $394 million, or $1.07 per share, a year earlier.
Reporting by Uday Sampath in Bengaluru and Michael Hirtzer in Chicago; Editing by Anil D'Silva and Bill Berkrot