Tyson Foods Inc. (TSN), the largest U.S. meat processor, on Monday slashed its full-year earnings forecast, citing weak international chicken demand and a slow recovery in its beef business, and posted a 19 percent drop in first-quarter profit.

Its shares dropped nearly 11 percent, hitting their lowest level in almost two years.

Tyson cut its fiscal 2006 profit outlook to a range of 50 cents to 80 cents a share from its prior forecast of 95 cents to $1.25. It forecast a net loss for the second quarter.

Analysts, on average, expected a profit of $1.08 a share for the year and profit of 22 cents a share for the second quarter, according to Reuters Estimates.

Tyson said profit was $39 million, or 11 cents a share, for the fiscal first quarter ended December 31, compared with $48 million, or 14 cents a share, a year earlier. Analysts, on average, had expected 15 cents a share.

Prices for chicken legs have fallen sharply due to weak exports, as concern over avian flu has cut into demand overseas.

Sales volume for chicken-quarter exports fell 12 percent in the quarter, and prices for the key export began to slide in December, Greg Lee, president of its international business, said. Current export prices for chicken quarters range from the low- to mid-20-cent-a-pound range, down from the mid-40s in the fall.

Tyson posted a $64 million operating loss in beef in the first quarter, and said it expected more of a loss in the second period.

On January 20 Japan halted U.S. beef imports after discovering a problem in a beef shipment from New York. The imports had been restarted in December, two years after they were shut down due to the first U.S. case of mad cow disease. Before December 2003, Japan had been the No. 1 importer of U.S. beef.

Special items in the year-earlier quarter resulted in a net gain of 3 cents a share to earnings, including gains from vitamin antitrust litigation and the sale of a stake in Specialty Brands Inc. , and a charge for closing a prepared foods plant.

Separately, Tyson said it was restating fiscal 2005 results, which will increase net income by $19 million, or 5 cents a share, to correct the tax treatment of a one-time gain.

Tyson said the restatement will result in the reporting of a material weakness in its internal controls, though management said on a conference call that this was typical of any financial restatement.

Tyson shares fell $1.32 to $14.05 on Monday on the New York Stock Exchange.

At the end of last week, the stock traded at about 14.5 times current-year estimated earnings, compared with 16.5 times for the Dow Jones U.S. Food Producers Index