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Omar Venerio
Omar Venerio
Articles (1601) 

US, Europe and Asia Deep in the Red on Monday

Tyson Foods gains 5%

U.S. stocks fell on Monday after the Chinese Central Bank devalued the Chinese yuan for the first time in more than a decade. The currency crashed to 7 units per dollar. The Dow Jones Industrial Average fell 3.15% to 25,665, the S&P 500 Index declined 3.16% to 2,838 and the Nasdaq Composite Index plummeted 3.71% to 7,706.

Shares of Tyson Foods Inc. (NYSE:TSN) jumped more than 5% after announcing third-quarter results. The company posted earnings of $1.47 per share on $10.89 billion in revenue, reflecting 8.4% growth from the prior-year quarter. Earnings were in line with estimates, but revenue fell short of expectations.

“Volume growth in our core retail lines continues to outpace other large food companies and the total food and beverage category, driven primarily by our new product innovation," President and CEO Noel White said. "Our Prepared Foods and Beef segments produced strong results in the quarter, while results in the Chicken segment were mixed, and the Pork segment was negatively affected by increased hog costs.” 

By segment, sales in the beef division increased due to improved availability of cattle supply and stronger demand. The operating income decreased due to higher fed cattle costs as well as increased operating and labor costs. The operating income rose on the back of live fed cattle costs, despite an increase in operating and labor costs.

Pork segment sales grew due to increased domestic availability of live hogs. The operating income decreased due to periods of compressed pork margins. Chicken sales increased as a result of higher volumes from business acquisitions. The operating income decreased due to increased operating costs and market conditions. The prepared foods business' sales volume decreased as a result of business divestitures.

Looking ahead to full-year 2019, the company expects sales of $43 billion. In 2020, it projects sales will grow to between $45 billion and $46 billion. It also projects the following figures: in the beef segment, the adjusted operating margin will be about 7% in fiscal 2019, the pork segment's adjusted operating margin will be 6%, the chicken segment's adjusted operating margin will also be around 6% and the prepared foods segment's adjusted operating margin will be about 12%.

During the quarter ended June 30, the T Rowe Price Equity Income Fund (Trades, Portfolio) reduced its stake by 1.3% to 4,315,000 shares. On the other hand, Ken Fisher (Trades, Portfolio) established a new 21,910-share holding.

Gainers

Losers

Global markets

The main European stock markets traded in the red. The U.K.'s FTSE 100 tumbled 2.47%, France's CAC 40 lost 2.19%, Germany's Dax retreated 1.80% and Spain's IBEX 35 slipped 1.35%.

In Asia, Japan's Nikkei 225 declined 1.74%, India’s BSE Sensex sunk 1.13%, Hong Kong's Hang Seng plummeted 2.85% and China's Shanghai Composite dipped 1.62%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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