Tyson Foods, the world’s largest meat processing company, has lowered its projected annual earnings after posting first quarter earnings of US$39m compared with $48m for the first quarter of the previous financial year, a year-on-year decline of 19%.
Tyson reported Monday (30 January) diluted earnings of $0.11 per share for the quarter ending 31 December, down from $0.14 for the first quarter of last year.
Sales totalled $6.5bn. Pre-tax earnings included $12m from antitrust litigation, a gain of $8m from the sale of Specialty Brands and $3m from the closure of its prepared foods plant. The combined effect increased diluted earnings per share by $0.03.
Commenting on the disappointing performance, John Tyson, chairman and CEO, said: “We entered fiscal 2006 knowing market conditions would be difficult, especially early in the year. During the first quarter our Chicken segment generated solid results and Prepared Foods improved, while Pork struggled and Beef further deteriorated, producing significant operating losses.”
Tyson’s beef interests reported losses of $64m for the quarter and steeper losses are expected in the second quarter.
The company expects that in the second quarter the chicken segment, which gave a solid performance in the first quarter, will contribute to an anticipated loss in the second quarter. “Recent declines in international demand for chicken coupled with greater than expected domestic supply will dramatically impact the projected performance of our chicken segment,” Tyson said.
Tyson has lowered its annual earnings forecast from its November prediction of between $0.95 and $1.25 per share to earnings per share of $0.50 and $0.80.