January 31, 2006

Tyson's Q1 net profit down 19 percent

Tyson Foods, the world's largest meat processor, said Monday that profit for Q1 ended Dec 31 fell 19 percent on weaker operating results in its pork and beef businesses. The company also lowers its forecast of fiscal 2006 earnings.

Earnings declined to US$39 million, or 11 cents per share, from US$48 million, or 14 cents per share, a year ago. The recent quarter included a US$12 million gain from antitrust litigation, a US$8 million gain from the sale of Tyson's interest in Specialty Brands Inc as well as US$3 million in costs related to the closure of a prepared foods plant.

Sales were flat at US$6.45 billion, as a modest rise in beef sales did little to offset declines in chicken, pork and prepared foods sales.

"During the first quarter our chicken segment generated solid results and prepared foods improved, while pork struggled and beef further deteriorated, producing significant operating losses," said Chairman and Chief Executive John Tyson in a statement.

He cautioned that falling demand for chicken in the international market "will dramatically impact the performance of our chicken segment".

Tyson now expects fiscal 2006 earnings of 50 cents to 80 cents a share, down from the previous forecast of 95 cents to US$1.25 a share.