Tyson Foods (NYSE:TSN) shares moved down over ten percent today after the company lowered its FY2007 guidance amid increasing grain prices. Further declines were curbed after the largest food producer in the world announced that it would outline a turnaround plan later this year. Shareholders are hoping that this plan will help unlock value and keep the company on track.

So, what improvements might this plan contain? Well, Tyson Foods has shown moderate top and bottom line growth but trades at a hefty premium to other companies in its sector. The company is now trading at 37x earnings when it should be trading at around 13x based on its historical 5 percent growth rate.

Tyson Foods has also failed to meet analyst expectations, surprising to the downside more than 30 percent on average. The problem seems to lie in the company's poor operating margins and operating efficiencies. Analysts and shareholders are hoping that management can work to improve these margins in order to weather the rising cost of grain and other goods.

Unfortunately, the company already has a leveraged balance sheet so any recapitalizations to fund a turnaround are out of the question. In fact, the company already has nearly 40 percent of its total capital tied up in long-term debt, which could spell trouble if its equity continues to tumble. Analysts and shareholders are hoping that these questions will be answered in the company's turnaround plan.

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