US meat giant Tyson foods has booked a drop in second-quarter earnings after the group saw a deterioration in its beef margins.
Tyson said second-quarter operating income dropped to US$174m, down from $306m in the comparable period of last year. Net income slid to $106m, from $166m, the group added.
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Profits were dented by weaker margins. CEO Donnis Smith suggested its beef segment had been hit as consumers switched to chicken as a cheaper option, with margins falling from 0% to 0.8%. Beef operating losses consequently totalled $26m in the quarter, up from a loss of $1m last year.
Tyson sales were actually up year-on-year, climbing to $8.42bn in the quarter from $8.27bn in the comparable period of 2012.
The Q2 result weighed on Tyson’s first half, which saw net profit fall to $274m from $322m. However, the group was upbeat on its prospects for the remainder of the fiscal. Tyson emphasised the second quarter is typically the most challenging period for the company and insisted it expects its results to strengthen in the back half of the year.
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By GlobalData
