Tyson Blames Weather, IBP Deal on Bad 2Q

Tyson Foods Inc. of Springdale blamed its terminated effort to acquire IBP Inc. and a severe winter as the leading causes for the poultry giant to post a second-quarter loss today.

Tyson reported a loss of $6 million, compared with a profit of $35.7 million during the fiscal second quarter last year.

Tyson had a 3 cents loss per share for the quarter, compared to 16 cents earnings per share during the same period last year. Excluding the one-time items, Tyson had a profit of 4 cents a share as sales rose 2 percent from last year to $1.83 billion.

In March, Tyson pulled out of a lengthy attempt to acquire the No. 1 beef producer in the U.S., IBP, for $3.2 billion.

During the past six months, Tyson reported 9 cents earnings per share, compared with 41 cents earnings per share last year. Six-month earnings at Tyson decreased $71.8 million from $92.7 million to $20.9 million.

“The second quarter has been one of the toughest in our history due to the lingering winter weather effects combined with the ongoing low prices for breast meat,” John Tyson, president, CEO and chairman of Tyson Foods, said. “We continue to see a shift in our mix toward value-added products that has resulted in revenue gains in each of our business segments. Our focus on growing market share in those products will pay off in the future. Looking ahead to the third quarter, we expect to see improving markets, improving costs and seasonal volume increases.”

Meanwhile, IBP’s fiscal first-quarter earnings released April 27 were down 66 percent. The Dakota Dunes, S.D., company also blamed its poor quarter on the failed acquisition by Tyson.

By midday today, Tyson’s stock (NYSE: TSN) was at $14.04 per share, while IBP (NYSE: IBP) was at $15.91. IBP was about $23 per share when Tyson announced it was pulling out of the deal. Tyson was at $11.50 per share on March 29, the day of the announcement.