Tyson Soars: What Goes Up Must Come Down

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Latest Pig Industry News

Tuesday, November 11, 2008

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Tyson Soars: What Goes Up Must Come Down

US - Tyson Foods Inc. has reported a net income jump up 50 per cent in its fiscal fourth-quarter earnings. The company was lifted on increased market prices of beef and pork. However, a big loss in its chicken sector warns of tougher times to come.

Tyson Foods Inc. warned that the current profits could swing to a loss in the current quarter amid a weakening global economy, a strengthening dollar and volatile commodity markets.

For the quarter ended Sept. 27, net income at the Springdale, Ark.-based meat processor rose to $48 million from $32 million a year earlier, largely driven by higher prices for beef, operating efficiency gains and increased international demand for pork. Revenue increased to $7.2 billion from $6.6 billion.

But Tyson's chicken business posted a $91 million loss. The unit continued to be dragged down by surging feed-grain costs, lower prices for boneless breast-meat, and weak demand from restaurants. In the quarter, its chicken unit lost $91 million compared with a profit of $63 million a year-earlier.

The company's loss was compounded by $230 million in increased costs for corn and soybean meal. For fiscal 2008, Tyson lost $118 million in the chicken business - its second largest business by total sales.

Tyson's beef unit reported am operating profit of $159 million for the quarter, while its pork business had a profit of $75 million. Average sales prices for beef rose 13%, while pork prices jumped almost 19%.

Tyson shares closed at $6.69, down 77 cents. The stock is down 56% this year.

ThePigSite News Desk