Tyson Foods Turns Profit, Sees Weakness in 2008
Tyson Foods, the world's largest meat company, Monday reported a fiscal fourth-quarter profit compared with a year-earlier loss, but forecast lower profit for fiscal 2008 due to expected high feed costs and difficult conditions in beef.
For the fourth quarter the company earned $32 million, or 9 cents per share, compared with a year earlier loss of $56 million, or 17 cents per share.
Wall Street on average expected 10 cents per share, according to Reuters Estimates.
Revenue for the period was $6.883 billion, compared with $6.471 billion a year earlier.
The company forecast fiscal-year 2008 earnings in a range of 30 to 70 cents per share, compared with 75 cents for the just-completed year. Analysts, on average, expected $1.10 for fiscal 2008, according to Reuters Estimates.
The 75 cents for fiscal 2007 matched Wall Street estimates and was within the company's revised guidance of 72 to 80 cents.
"As we begin 2008, we are experiencing some challenging market conditions. Based on present assessments, we believe we will incur additional increased grain costs of approximately $300 million in the chicken segment," Tyson Chief Executive Richard Bond said in a statement. "The current beef environment is extremely difficult as well."
Tyson raises the chickens its processes, but buys the cattle and hogs that it processes into beef and pork. Tyson has been hurt by high corn prices as ethanol makers compete with livestock producers for the feed grain.
High cattle prices have been particularly troublesome for the company. Tight supplies of grain-fed cattle this year have kept cattle prices high, while a slower-than-expected resumption of beef exports to some countries have hurt sales.