Tyson, the world’s largest meat processor, yesterday (31 July) reported a loss for the third quarter – its second consecutive quarterly loss – and lowered its outlook to predict a loss for the full year.
The loss for the quarter ended 1 July totalled US$52m, or 15 cents a share, down from a positive income of $131m, or 36 cents a share in the same period of the previous year.
Sales declined by 4.8% from $6.71bn to $6.38bn, with challenging conditions hampering sales of the company’s beef and poultry segments.
Richard L. Bond, president and chief executive officer, commented: “Despite improvements, the third quarter remained challenging with losses in the chicken and beef segments. The oversupply of chicken and forward sales of leg quarters led to lower average sales prices in the third quarter as compared to the same quarter last year. In our beef segment, May and June were positive, but not enough to offset a very difficult April. In addition, our Canadian operations continue to struggle, compounded by the strong Canadian currency.”
Bond predicted “positive results” in the poultry unit after the reduction of chicken inventories.
Tyson forecast a full-year loss of between 41 and 51 cents a share. The company had previously predicted that earnings would range from a loss of 25 cents to profit of 10 cents per share.
Tyson said its chicken unit had an operating loss of $59m in the quarter ended, down from a profit of $198m reported last year.
Tyson’s beef business reported a loss of $10m, compared to a profit of $36m a year earlier. This is the fourth consecutive loss in Tyson’s beef division, which has been hurt by BSE scares and the closure of export markets to Japan and Korea. Japan’s ban on US beef was lifted last week.
Tyson has announced a $200m cost-cutting plan earlier this month and said it expected the savings to boost its results in fiscal 2007.