Springdale, Arkansas-based meat giant Tyson Foods has reported US$0.36 diluted earnings per share for the first fiscal quarter ended 29 December, compared to US$0.12 diluted earnings per share in the same quarter last year.
On 28 September, the company acquired the remaining shares of IBP. Accordingly, first quarter fiscal 2002 results include 100% of IBP’s operations.
First quarter sales were US$5.86bn compared to US$1.77bn last year. Operating income was US$273m compared to US$68.1m in the same quarter last year with operating margin at 4.7% compared to 3.9% last year.
Chicken segment operating margin was 7.8% for the current quarter and 4% for the same quarter last year. Beef segment, pork segment, and prepared foods segment operating margins were 1.9%, 6.8%, and 3.8%, respectively. The beef segment and the majority of the pork and prepared foods segments resulted from the fourth quarter acquisition of IBP and therefore, operating margins for the prior year quarter are not presented. Earnings for the first quarter of fiscal 2002 were US$126.9m compared to US$27m for the same period last year.
John Tyson, chairman and CEO, said: “As I think about all that has been accomplished in the past year, I am most proud of how our folks have kept their focus on their customers and business.
“The hard work of our people over the past year on our chicken business shows in its results, our pork business had a tremendous quarter, and our beef and prepared foods segments showed solid results.
“I’m especially pleased that we reduced our debt by US$427.9m during the quarter and by over US$550m since we closed the cash tender for IBP on 3 August. Our second quarter is always a much more challenging earnings quarter, but we remain optimistic about our outlook for the fiscal year.”
At this time, the company expects fiscal second quarter 2002 diluted earnings per share to be in the range of US$0.17 to US$0.20, and has improved its outlook for fiscal 2002 diluted earnings per share to a range of US$1.10 to US$1.20. The company’s earnings for fiscal 2002 include 100% of IBP’s operations.
In connection with the IBP acquisition, the company became the world’s largest protein provider and as a result, the composition of its reportable segments changed. The company operates in five business segments: Beef, Chicken, Pork, Prepared Foods and Other. The company measures segment profit as operating income.
The Beef segment is primarily involved in the slaughter of live fed cattle and fabrication of dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. It also involves deriving value from allied products such as hides and variety meats for sale to further processors and others. The Beef segment markets its products to food retailers, distributors, wholesalers, restaurants and hotel chains and other food processors in domestic and international markets. Allied products are also marketed to manufacturers of pharmaceuticals and technical products.
The Chicken segment includes fresh, frozen and value-added chicken products sold through domestic food service, domestic retail markets for at-home consumption, wholesale club markets targeted to small foodservice operations, small businesses and individuals, as well as specialty and commodity distributors who deliver to restaurants, schools and international markets throughout the world. The Chicken segment also includes sales from allied products and the chicken breeding stock subsidiary.
The Pork segment represents the company’s live swine group, hog slaughter and fabrication operations, case-ready products and related allied product processing activities. The Pork segment markets its products to food retailers, distributors, wholesalers, restaurants and hotel chains and other food processors in domestic and international markets. It also sells allied products to pharmaceutical and technical products manufacturers, as well as live swine to pork processors.
The Prepared Foods segment includes the company’s operations that manufacture and market frozen and refrigerated food products. Products include pepperoni, beef and pork toppings, pizza crusts, flour and corn tortilla products, appetizers, hors d’oeuvres, desserts, prepared meals, ethnic foods, soups, sauces, side dishes, specialty pasta and meat dishes as well as branded and processed meats.
The other segment includes the logistics group and other corporate groups not identified with specific protein groups.