Meat company Tyson Foods Inc has reported reduced profits for the third quarter ended 2 July 2005, cut by legal costs and the cost of a plant closure as well as slow pork sales.
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Third quarter 2005 sales were $6.7bn compared to $6.6bn for the same period last year. Operating income was $263m compared to $323m and net income was $131m compared to $161m for the same period last year.
Pretax earnings for the third quarter of fiscal 2005 included $33m of costs related to a legal settlement involving the company’s live swine operations, as well as $10m of costs related to poultry plant closings resulting from the on-going effort to increase the production of value-added products and enhance operating efficiencies.
Sales for the first nine months of fiscal 2005 were $19.5bn compared to $19.3bn for the same period last year. Operating income for the first nine months of fiscal 2005 was $575m compared to $747m and net income was $255m compared to $337m for the same period last year.
“The chicken segment performed well, and beef and prepared foods improved compared to the first half of the year, but our pork results were disappointing,” said John Tyson, chairman and CEO. “We continued to generate strong cash flow which enabled us to achieve our debt to capital goal one quarter earlier than expected. Our value-added product mix continues to grow and we expect it to reach 40% by the end of our fiscal year. We made progress on our effort to improve our operating efficiencies. However, we also expect the fourth quarter to be more challenging.”
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