Tyson Foods posts first-quarter profit
February 5, 2010
by Keith Nunes
SPRINGDALE, ARK. — Tyson Foods, Inc. rebounded from a difficult first quarter of fiscal 2009, posting net income of $160 million, equal to 42c per share of common stock, during the first quarter of fiscal 2010, ended Jan. 2. The profit compared with a loss of $102 million in the same period a year ago.
Sales for the quarter were $6,635 million, slightly ahead of revenues of $6,521 million during the first quarter of 2009.
“With more than half a billion dollars in operating cash flow, we generated a record first quarter e.p.s. of 42c and drove down net debt by $400 million,” said Donnie Smith, president and chief executive officer. “Beef, Pork and Prepared Foods continued to execute well, and Chicken began to show the improvement we've been working toward for more than a year.”
The company’s Chicken and Beef units showed marked improvement during the first quarter. In 2009, Tyson Foods’ Chicken segment recorded an operating loss of $286 million. During the same period in 2010, the segment’s operating income was $78 million.
Tyson Foods said it expects seasonal chicken demand will improve as 2010 progresses, and it expects the pricing environment to improve due to cold storage inventories and pullet placements, which are down relative to the levels they have been over the last several years. The company also expects to see grain costs down as compared to fiscal 2009.
The Beef segment’s operating income was $119 million, a significant improvement over the first quarter of 2009 when the unit broke even. The company expects a reduction of 1% in cattle supplies during the rest of 2010, but does not expect any changes in the fundamentals of its beef business.
Both the Pork and Prepared Foods business units showed improvement in operating income compared with the same period during 2009. The Pork segment’s operating income increased to $62 million during the first quarter of 2010 compared with $55 million during 2009. Prepared Foods’ operating income was $55 million, a $20 million increase over the same period during 2009.