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Rising COVID-19 Cases PlagueTyson Foods' Exports to China
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Though bans related to COVID-19 are being gradually lifted, the second wave of cases seems to be hitting and affecting operations of companies across several industries. One such company falling prey to the crisis is Tyson Foods, Inc. (TSN - Free Report) . The customs administration of China has temporarily suspended chicken imports from a Tyson Foods facility located in Springdale, Arkansas, as reported by sources. Reportedly, the suspension was caused due to a cluster of coronavirus cases that were recorded among the unit’s employees recently.
Apparently, hundreds of Tyson Foods’ employees in Arkansas tested positive for coronavirus last week. Almost half of these workers belonged to the facility located at Springdale.
Markedly, China is a key market for Tyson Foods’ exports. In its last earnings call, management stated that the region had begun to see impressive post COVID-19 recovery. Further, management then notified that according to the World Health Organization there has been no proof linked to the transmission of coronavirus infection via food. However, health officials of China are of the opinion that the virus could be transmitted through the product’s package.
This bold move by China is a consequence of a second wave of coronavirus cases being felt in the country. Beijing which is under partial lockdown confirmed several new COVID-19 infections in the last few days – per media reports. Reports also suggest that the second fallout of positive cases is likely to be linked to Beijing’s largest wholesale vegetable and meat market.
In April, Tyson Foods had temporarily ceased production at its beef facility located at Pasco, WA. This decision was caused by labor absenteeism, coronavirus cases as well as community concerns. Tyson Foods had undertaken similar decision to halt production at its Logansport as well as Waterloo production facilities to enable COVID-19 testing for workers. Some sources suggested that although the manufacturing units have been routinely sanitized but the workers are finding it difficult to maintain social distance at the processing lines.
Tyson Foods is being affected by lower workforce, supply-chain volatility and the temporary idling of facilities. Such hurdles are expected to elevate the company’s operating and production cost burden and also weigh on its volumes for the remainder of fiscal 2020. Moreover, though every segment is seeing a demand shift from foodservice to retail, retail volume increases have not been enough to compensate for soft foodservice volumes. Management expects volumes to decline in the second half of fiscal 2020. The company particularly said that it expects the current market scenario to continue in the third quarter of fiscal 2020.
We note that, shares of this Zacks Rank #4 (Sell) company have lost 31.7% in the past six months compared with the industry’s decline of 11%.
Kimberly-Clark (KMB - Free Report) which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 5.1%.
The Clorox Company (CLX - Free Report) , which carries Zacks Rank #2, has a long-term earnings growth rate of 5.8%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Shutterstock
Rising COVID-19 Cases PlagueTyson Foods' Exports to China
Though bans related to COVID-19 are being gradually lifted, the second wave of cases seems to be hitting and affecting operations of companies across several industries. One such company falling prey to the crisis is Tyson Foods, Inc. (TSN - Free Report) . The customs administration of China has temporarily suspended chicken imports from a Tyson Foods facility located in Springdale, Arkansas, as reported by sources. Reportedly, the suspension was caused due to a cluster of coronavirus cases that were recorded among the unit’s employees recently.
Apparently, hundreds of Tyson Foods’ employees in Arkansas tested positive for coronavirus last week. Almost half of these workers belonged to the facility located at Springdale.
Markedly, China is a key market for Tyson Foods’ exports. In its last earnings call, management stated that the region had begun to see impressive post COVID-19 recovery. Further, management then notified that according to the World Health Organization there has been no proof linked to the transmission of coronavirus infection via food. However, health officials of China are of the opinion that the virus could be transmitted through the product’s package.
This bold move by China is a consequence of a second wave of coronavirus cases being felt in the country. Beijing which is under partial lockdown confirmed several new COVID-19 infections in the last few days – per media reports. Reports also suggest that the second fallout of positive cases is likely to be linked to Beijing’s largest wholesale vegetable and meat market.
In April, Tyson Foods had temporarily ceased production at its beef facility located at Pasco, WA. This decision was caused by labor absenteeism, coronavirus cases as well as community concerns. Tyson Foods had undertaken similar decision to halt production at its Logansport as well as Waterloo production facilities to enable COVID-19 testing for workers. Some sources suggested that although the manufacturing units have been routinely sanitized but the workers are finding it difficult to maintain social distance at the processing lines.
Tyson Foods is being affected by lower workforce, supply-chain volatility and the temporary idling of facilities. Such hurdles are expected to elevate the company’s operating and production cost burden and also weigh on its volumes for the remainder of fiscal 2020. Moreover, though every segment is seeing a demand shift from foodservice to retail, retail volume increases have not been enough to compensate for soft foodservice volumes. Management expects volumes to decline in the second half of fiscal 2020. The company particularly said that it expects the current market scenario to continue in the third quarter of fiscal 2020.
We note that, shares of this Zacks Rank #4 (Sell) company have lost 31.7% in the past six months compared with the industry’s decline of 11%.
Some Solid Consumer Staple Picks
United Natural Foods, Inc. (UNFI - Free Report) currently has an Earnings ESP of +11.59% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kimberly-Clark (KMB - Free Report) which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 5.1%.
The Clorox Company (CLX - Free Report) , which carries Zacks Rank #2, has a long-term earnings growth rate of 5.8%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>