September 9, 2011

Tyson: Beef and pork to counter faltering chicken business

Strong performances of beef and pork are set to counter the chicken price slump although earnings per share this fiscal year would be short of the year prior due to traditionally high input costs and the effects of a weak economy, says Tyson Foods Inc. CEO, Donnie Smith.

Much of the company's gains in the chicken business are being wiped out by additional grain and feed-ingredient costs, he said, though he was optimistic about the business.

"Industry fundamentals are beginning to improve, and that should support the pricing we need to offset our higher inputs," Smith said.

In the fiscal third quarter, the company's most recent, profit fell 21%, largely because of the weak chicken market.

On Wednesday (Sep 7), Smith said the chicken segment's 1% return on sales in the fiscal third quarter would have been nearly 10% if not for the higher input costs. "That would have been a record quarter, despite unusually low chicken prices," he said.

Last year, the largest US meatpacker reported US$2.06 a share in earnings. Analysts surveyed by Thomson Reuters most recently expected US$1.94 a share this year, which ends at the end of the month.