April 27, 2004
Profits Grow 65% At Tyson
Tyson Foods, the world's largest meat company, posted a 65 percent increase in second-quarter profit, despite trade restrictions that limited poultry and beef sales.
For the three months ending March 27, Tyson earned $119 million, or 33 cents per share, up from $72 million, or 20 cents per share, in the same period a year ago.
Analysts had expected 27 cents per share.
Sales were $6.2 billion, compared with $5.8 billion in the same period last year.
The earnings results were affected by pretax charges of $14 million, or 2 cents per share, in relation to closings of poultry and prepared foods plants. The company also revealed that grain-market hedging against higher prices for feed resulted in an approximate $50 million net benefit in the chicken segment.
In a telephone conference call with analysts, Tyson officials said they expected some of those bans to be lifted soon.
"The (chicken) bans . . . have gone on longer than we would have expected, but progress is being made in getting them open," said Tyson Chief Administrative Officer Greg Lee. "We expect Hong Kong, China and Japan to lift their bans within the next 60 days."
But Lee and other Tyson officials stated that the company's expectations of earnings in the $1.05 to $1.25-per-share range for the full fiscal year were not based on any change in the bans.
For the first six months of its fiscal year, Tyson earned $176 million, or 49 cents per share, compared with $111 million, or 31 cents per share, for the same period a year ago. Six-month sales totaled $12.7 billion, compared with $11.6 billion at the same time in 2003.
In late March, Tyson was the subject of a formal investigation by the Securities and Exchange Commission into benefits received by some board members and company officers. Tyson did not release details of the probe but said its focus is "perquisites provided to certain directors and officers of the company." Tyson pledged its cooperation with investigators.
Tyson has 300 facilities and offices in 26 states spanning 22 nations. The company employs 120,000 people.
In trading on the New York Stock Exchange, Tyson shares were down 46 cents to close at $18.64.