Tyson Foods profit jumps on record beef and pork sales

Springdale-based Tyson Foods Inc. boosted its third quarter profits by nearly 90% as record beef and porks price and improved chicken margins pushed earnings well ahead of expectations.

The company reported earnings Monday morning (Aug. 9) before the markets opened.

"This was a fantastic quarter for Tyson Foods, with record earnings, sales and operating margin," said Donnie Smith, Tyson’s president and CEO. "With more than $600 million in operating cash flow, we were able to pay down debt by $400 million while continuing to invest in our business, bringing our debt to its lowest level since 2001.”

For the period ended June 30, Tyson reported net income of $248 million or 65 cents per share, compared to $131 million, or 35 cents per share last year. Revenues jumped to  $7.44 billion, up 11.7% from $6.66 billion a year ago.

Wall Street analysts, on average, expected third quarter earnings of 58 cents per share on revenue of $7.26 billion, according to Thomson Reuters.

Overall, Smith said the company’s operational improvements and lower interest expense will help us to finish fiscal 2010 strong and Tyson in a good financial position for fiscal 2011.

"Looking ahead, our operational improvements and lower interest expense will help us finish 2010 in a great position and give us a strong start to 2011," Smith said. "We expect overall protein production (beef, chicken, pork and turkey) to increase in fiscal 2011 compared to fiscal 2010. We also anticipate that export markets will improve in 2011."

Overall, the four major segments of the company’s business saw sales and operating income gains in the third quarter.
• Chicken: sales of $2.527 billion, with operating income of $186 million
• Beef: sales of $3.149 billion, with operating income of $176 million
• Pork: sales of $1.249 billion, with operating income of $125 million
• Prepared Foods: sales of $753 million, with operating income of $22 million

The prepared foods segment was the only segment to see an operating income decline compared to the 2009 period.

For the first nine months of the company’s fiscal year, it has posted $20.989 billion, up 7.6% over the same period in 2009. Net income for the first three quarters totals $567 million, a big improvement over the $90 million loss for the same period in 2009.

The company has had mixed results in its previous three fiscal years. In fiscal year 2009 (ended Oct. 3), the company lost $537 million. In fiscal years 2008 and 2007, Tyson Foods earned $86 million and $268 million, respectively.

Tyson Foods’ shares (NYSE: TSN) were set to open Monday morning at $17.14. During the past 52 weeks the share price has ranged from a $20.57 high to a $10.94 low.