Tyson Reports Sales Drop; IBP Offer Clears Review

Tyson Foods Inc. exceeded earnings estimates with 12 cents diluted earnings per share during the first quarter that ended Dec. 30. Nevertheless, continued poor market conditions had the Springdale company coming up well short of its sales and earnings from the same period last year.

Its earnings were at 25 cents during the first quarter of the previous fiscal year. Earnings dropped from $57 million during the first quarter last year to $27 million this year, a 53 percent decrease. Sales dropped from $1.78 billion during the first quarter of last year to $1.74 billion this year, and gross profit dropped from $313 million to $261 million.

“While we met earnings expectations, we continue to be disappointed in the depressed market conditions for chicken,” John Tyson, president and CEO of Tyson Foods, said. “During this difficult time we have remained focused on moving our products further up the value chain and growing our market share, resulting in less dependency on pure commodity sales. We feel we are extremely well positioned to capitalize on the more favorable market supply forecasts for the spring of this year.

“In the meantime, we will continue to closely manage the fundamentals of our business.”

Tyson announced today that its proposed $3.2 billion acquisition of IBP Inc. had cleared U.S. regulatory review.

IBP’s letter to Tyson Foods last week stated, “… We join Tyson in its desire to promptly complete the Tyson-IBP combination.” Tyson said last week it had delayed its takeover of IBP, saying IBP failed to disclose a federal inquiry into its accounting practices.