May 8, 2012

Tyson Foods' Q2 earnings up 4% due to better pricing

Due to better pricing, Tyson Foods reported increasing profit and revenue in the second quarter and shares jumped nearly 4% in early trading.

Net income rose 4% to US$166 million, or US$0.44 per share, from US$159 million, or US$0.42. That beat the US40.39 predicted by analysts polled by FactSet.

Revenue rose 3% to US$8.3 billion for the period covering January-March. However, that missed the US$8.47 billion expected by analysts. While sales volume actually fell 4%, Tyson was able to get higher prices overall for its products. Like its rivals, Tyson is paying more for feed, so it's raising prices and cutting expenses to make up for the extra cost. Shares rose US$0.67 to US$18.71 on the report.

CEO Donnie Smith said he expects the company to gain momentum in the coming months and that Tyson still has the potential to earn US$2 per share for the year, as it previously predicted.

Higher sales volume internationally helped during the most recent months, the company said.