Tyson Foods Profits Boosted by Higher Selling Prices, Raises Outlook
Tyson Foods, the world's No. 1 meat producer, reported a larger-than-expected quarterly profit on Monday due to higher beef, chicken and pork prices.
The quarterly profit was the third in a row for the company, which a year ago was posting losses and launched a $200 million cost-cutting program.
For the fiscal third quarter ended June 30, Tyson earned $111 million, or 31 cents per share, compared with a year-earlier loss of $52 million, or 15 cents per share.
The results topped analysts' averaged earnings forecast of 25 cents a share, according to Reuters Estimates.
Tyson raised its earnings estimate for the full year to a range of 82 cents to 92 cents a share, up from a previous forecast of 65 cents to 90 cents.
Analysts expect 85 cents a share, according to Reuters Estimates.
Sales for the third quarter rose to $6.96 billion from $6.38 billion a year earlier.
"Tyson beat ... our (profit) estimate by 10 cents, mainly by better-than-expected performance in the chicken unit, which we attribute mostly to improved mix and cost savings," JP Morgan analyst Pablo Zuanic said in a research note.
The chicken unit, the second-largest in the United States, posted operating earnings of $95 million, compared with a year-earlier loss of $59 million.
Tyson said higher chicken prices offset higher feed costs. In late June the Department of Agriculture put the average wholesale price for whole chickens at 80.60 cents per pound, up from a year-earlier average of 64.27 cents.
Tyson raises its own chickens but buys the cattle and hogs it turns into beef and pork products.
Its beef unit, the nation's largest, had a third-quarter operating profit of $33 million, compared with a loss of $10 million a year earlier. Sales rose to $3.36 billion from $3.03 billion.
Pork operating profit was $37 million, up from $12 million a year earlier. Sales increased to $853 million from $754 million.
Tyson Chief Executive Richard Bond said in a statement, "Sales dollars, operating income and operating margins are greatly improved in all four segments over the third quarter of 2006 as well as the second quarter of 2007."
After beef, chicken and pork, the company's fourth business segment is prepared foods.
Third-quarter sales volumes were down, primarily due to planned production cuts and higher selling prices, Tyson said.
Tyson shares were up 11 cents at $21.52 in morning trade on the New York Stock Exchange. The shares have traded in a 52-week range of $24.32 to $13.05.