(Bloomberg) -- Tyson Foods Inc (NYSE:TSN)., the biggest U.S. meat processor, reported sales that missed analyst estimates on the same day the company said it would expand its global footprint by buying poultry plants in Asia and Europe.
The company’s pork sales volumes and prices decreased in the first quarter, according to a statement Thursday on earnings. While chicken volumes rose after acquisitions, sales prices still fell. Shares dropped in pre-market trading.
The meat giant has been battling lackluster market conditions for some time as a boom in American meat production has dragged prices lower. Tariffs from key trading partners, including China, further added to the glut amid pressure on U.S. exports. To combat the volatility, the company has pushed to expand its global presence while also focusing on offering more value-added products, like chicken nuggets. Earlier Thursday, Tyson said it is purchasing six facilities from Brazil’s BRF SA for $340 million, including operations in Asia and the U.K.
Commodity companies have struggled to boost profits as changing tastes and a fast-paced lifestyle mean consumers prefer specialty items and easy-to-cook meals. That’s pushed Tyson and its rivals to focus on products such as pre-cut meat. In 2017 and 2018, Tyson spent more than $7 billion on takeovers, including a $2.5 billion deal to buy chicken-nugget maker Keystone Foods.
Earlier this week, CNBC reported Tyson held talks to buy closely held meat company Foster Farms for about $2 billion. Foster Farms sells poultry products like seasoned chicken cuts, ground turkey and frozen chicken nuggets and strips, according to its website. It also produces deli meats and frozen corn dogs.
While Tyson’s sales missed estimates, earnings per share were $1.58, compared with $1.56 forecast by analysts. The company affirmed its guidance for the full fiscal year.
“Global protein demand remains strong, and we are well positioned to meet the demand,” Tyson Chief Executive Officer Noel White said in the earnings statement.
(Updates with sales miss in first paragraph.)
