(Adds background on other lawsuits, analysts' comments,
Sanderson Farms no comment, closing stock prices)
By Tom Polansek and Sruthi Ramakrishnan
Feb 6 Tyson Foods Inc disclosed on
Monday it has received a subpoena from the U.S. Securities and
Exchange Commission following allegations it conspired with
rivals for years to fix chicken prices.
The chicken sector, which is dominated by a handful of large
meat companies, has come under increased scrutiny over the past
year as customers and farmers have alleged antitrust violations
relating to pricing, production and compensation.
U.S. poultry buyers claimed in a lawsuit in 2016 that Tyson,
the nation's biggest chicken processor, and its competitors had
colluded since 2008 to reduce output and manipulate prices.
Tyson, Pilgrim's Pride Corp and Sanderson Farms Inc
have denied the accusations.
Investors in separate lawsuits have alleged the processors
made misleading statements or failed to disclose information
about price fixing.
Tyson Chief Executive Tom Hayes declined to share details
about its subpoena on a conference call with reporters after the
company reported better-than-expected quarterly sales and
profit. He said the company had not changed pricing practices.
Tyson received the subpoena from the SEC on Jan. 20 in
connection with an investigation related to the company,
according to regulatory documents.
The seller of Ball Park hot dogs said it had limited
information and was cooperating with the probe, which is in an
Pilgrim's Pride said it had not received a subpoena from the
SEC. Sanderson Farms declined to comment.
Tyson's stock ended down 3.5 percent at $63.13. Shares of
Pilgrim's Pride, mostly owned by meat packer JBS SA,
lost 4 percent to $18.64. Sanderson Farms shares slid 1.9
percent to $89.50.
Commenting on the subpoena, JPMorgan analyst Ken Goldman
said "obviously it is not a positive" for Tyson.
Joe Agnese, analyst for CFRA Research, said the news will
restrict Tyson's valuation until investors' concerns are
The subpoena arrived as Hayes is finding his footing as
Tyson's new CEO after taking over for Donnie Smith on Dec. 31.
Tyson has sought to increase profit by selling more
value-added items such as pre-seasoned products and
heat-and-serve meals, which command higher margins than basic
Net income attributable to the company rose to $1.59 per
share in the quarter ended Dec. 31 from $1.15 a year earlier.
Sales were $9.18 billion, up from $9.15 billion.
Analysts on average expected earnings of $1.26 and revenue
of $9.05 billion, according to Thomson Reuters I/B/E/S.
Tyson raised its full-year profit forecast to $4.90 to $5.05
per share from $4.70 to $4.85.
(Reporting by Tom Polanasek in Chicago and Sruthi Ramakrishnan
in Bengaluru; Editing by Meredith Mazzilli and Matthew Lewis)