US: Feed costs weigh on Tyson Q1 profits
Tyson's net profits slumped 48% in the quarter
US meat giant Tyson Foods has booked a drop in first-quarter profits as feed costs continue to weigh on the company's earnings.
For the period to the end of December, net profit slumped 48% to US$156m. Tyson blamed the decline on an increase in feed costs compared to last year. Operating profit slid by 73.2% to $31m.
Sales in the quarter, however, climbed by 9.4% to reach $8.33bn on the back of price increases. Volumes from Tyson's chicken, beef and prepared food divisions fell, although pork volumes were up 2.6%.
Tyson president and CEO Donnie Smith said: "Even with higher feed ingredient costs, our chicken segment returned to profitability in the fiscal first quarter on improved pricing and execution."
He added: "Prepared foods had a strong performance, and the pork segment continued to produce outstanding results. Our beef segment is experiencing a rough patch as a result of challenging market fundamentals. Although we are still outperforming industry indexes, if current conditions continue, our beef results will be pressured in our second quarter."
Looking ahead to the full year, Smith said chicken, beef, pork and turkey production is expected to drop, with availability forecast to be down 2% to 3% on fiscal 2011. This, he said, should "continue to support improved pricing".
Tyson's share price rose 4.08% to close at $19.38 on Friday.
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