November 20, 2012

Tyson Q4 earnings rise 91%

Tyson Foods Inc.'s fiscal fourth-quarter earnings increase 91% as profitability for the meat processor begins to improve.

Tyson's earnings in the latest quarter and fiscal year show the company "is rising above the noise of commodity markets to produce solid, more consistent results," President and Chief Executive, Donnie Smith, said.

Tyson and other food companies have been challenged by rising feed costs stemming from a drought in the Midwest. The company also has faced weak demand for beef and pork products as consumers grapple with rising food costs and as a sluggish economy has shoppers keeping a close watch on their budgets. In the chicken sector, in addition to high grain costs, meatpackers such as Tyson also have grappled with an oversupplied market.

Tyson has been cutting its costs and debt, as well as striving to expand sales in emerging markets, in an effort to mitigate the impacts of the high commodities costs.

Mr. Smith said the recently started fiscal year "is likely to be equally if not more difficult."

For the quarter ending September 29, Tyson reported a profit of US$185 million, up from $97 million a year earlier

Tyson's chicken business swung to a profit of US$116 million, compared with a year-earlier loss of US$82 million as sales rose 5.5% amid average price increases of 9.4%.

The company's beef segment saw its sales decline 2.4% as sales volume dropped 13%, contributing to a 0.9% decline in segment operating earnings. Pork segment sales declined 7.8% as average prices weakened by 12% contributing to a 40% decline in operating profit.