Tyson Foods did chicken right, but still saw lower profits than one year ago.
On Monday (August 6), Springdale-based Tyson Foods reported earnings of $76 million on sales of $8.3 billion. In last year’s third quarter, Tyson Foods reported profits of $196 million on revenue of $8.25 billion.
The company also took a $167 million one-time charge for the early extinguishment of debt.
“We produced solid results in our fiscal third quarter despite softer than expected domestic demand for protein,” said Donnie Smith, Tyson Foods CEO. “I am especially pleased with the performance of our Chicken and Prepared Foods segments. Our Beef and Pork segments have been operating in very difficult market conditions that will result in our earnings for fiscal 2012 coming in lower than we previously projected.”
Tyson Foods’ chicken segment improved its operating margins substantially during the quarter, and its prepared foods also turned in solid results. Pork, which has been a major profit center for the meat giant, stumbled in its profitability, while beef — which has been hard hit by drought and other market conditions — struggled but maintained profitability.
“Grain costs have been increasing significantly and rapidly, largely as a result of the on-going U.S. drought. While we ultimately expect to pass along rising input costs, these costs, coupled with continued soft demand, are likely to pressure earnings in 2013,” Smith said.
“We’re often faced with challenges in our business, but our strategy will allow us to manage through trying times for continued success. We are focused on growing our prepared foods, international poultry and value-added poultry businesses. We can’t make it rain, but we can execute against our strategy by producing high quality foods using innovative and cost effective processes. It’s tough right now, but I’m confident we will come out of this in even better shape than we are in today,” Smith added.