Avian Flu Not Likely to Become a Human Virus; Tyson Foods Still Reeling from Its Effects

| About: Tyson Foods (TSN)
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Avian-Flu Study Reveals Hurdles for a Pandemic and Tyson Pares Its Outlook, Posts Loss

  • Summary: In research published in the latest Proceedings of the National Academy of Sciences journal, CDC scientists reported that a simulation of one of two main paths the H5N1 virus could take to adapt itself to humans -- mixing genes with a common human-flu virus -- didn't create a lethal superbug that could jump from human to human. Still, such findings don't mean that the deadly H5N1 virus, which has ravaged poultry flocks across Asia, Europe, and Africa and killed at least 134 people since 2003, doesn't pose a pandemic threat, CDC Director Julie Gerberding warned. Instead, they indicate "that it is probably not a simple process."

    Meanwhile, Tyson Foods, in a sign the chicken industry is still struggling with the effects of avian-flu worries, cut its fiscal-year outlook for the third time and announced plans to further reduce production. Tyson also said its electricity and fuel costs climbed $137 million during the first nine months, cutting into its profits for FY06. Tyson reported a third-quarter loss of $52 million, or 15 cents a share, for the quarter ended July 1. In the year-ago period, Tyson earned $131 million, or 36 cents a share. Sales fell 4.8% to $6.38 billion from $6.7 billion a year earlier. Tyson said its expects to generate a fiscal-year loss in the range of 41 to 51 cents a share, after initially forecasting a loss of 25 cents to a gain of ten cents per share. In trading yesterday, shares of Tyson fell 42 cents, or 2.9%.

  • Comment on related stocks/ETFs: Leading up to yesterday's earnings report, the experts had the outlook for Tyson Foods all wrong. Read Investopedia Advisor's The Bull Case for Tyson Foods and S&P's 10 Stocks for a Struggling Market summarized by David Jackson.