Tyson suffers US$112 million loss during Q1

Tyson Foods, Inc. suffered a significant loss during the first quarter of fiscal 2009 due to high feed costs and commodity risk management activities in the grain and energy sectors of its poultry division.

 

For the quarter ended December 27, 2008, the company recorded a loss of US$112 million.

 

The result compares unfavourably to the first quarter of fiscal 2008, when Tyson Foods had a net income of US$34 million, equal to US$0.12 per share of common stock.

 

Sales for the quarter were US$6,521 billion compared with US$6,476 for the same period during fiscal 2008.

 

Within Tyson's poultry division, the company suffered a US$286 million operating loss on US$2.2 billion in sales during the quarter.

 

The segment's results were impacted by an increase in grain costs of US$183 million and a net loss of US$197 million from commodity risk management activities related to grain purchases as compared to the same period of fiscal 2008, according to the company.

 

Tyson interim president and chief executive officer, Leland Tollett said while the first quarter of fiscal 2009 was clearly challenging, our poultry fundamentals are improving.

 

Tollett said production was reduced by approximately 5 percent in early December when demand began a noticeable decline and the company remain intensely focused on improvements in such areas as product mix, yields and efficiencies.

 

Tyson's beef division operating income was breakeven, according to the company, on sales of US$2.7 billion during the first quarter.

 

The division's results were positively impacted by increased average sales prices and lower average live animal prices as well as risk management activities related to futures contracts related to live cattle.

 

Within the company's Pork and Prepared Foods segments, operating income was US$55 million and US$35 million, respectively.