Tyson Foods records loss during second quarter

by Keith Nunes
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SPRINGDALE, ARK. — Tyson Foods, Inc. recorded a loss of $5 million during the second quarter of fiscal year 2008, ended March 29. The results compare unfavorably to net income of $68 million, or 19c per common stock, the company earned during the same period of fiscal 2007.

The second-quarter loss includes pre-tax charges of $47 million related to plant closings and asset impairments, according to the company. During the quarter, Tyson Foods restructured operations at its Emporia, Kas., beef facility and closed its chicken processing facility in Wilkesboro, N.C.

Sales for the quarter were $6,612 million during 2008 compared with $6,501 million for the same period last year.

On a segment-by-segment operating income basis, Tyson Foods’ Chicken and Beef businesses sustained losses of $61 million and $11 million, respectively, while Pork, Prepared Foods and Other earned $63 million, $20 million and $33 million, respectively.

"Our Pork segment did very well, delivering its best January-March quarter ever," said Richard L. Bond, president and chief executive officer of Tyson Foods. "Our Chicken segment suffered losses due to significantly higher and volatile input costs."

Looking to the third quarter, Mr. Bond said he expects the Beef segment to improve as the summer grilling season gets under way and South Korea starts to import U.S. beef.

"The Pork segment should do well again, although not as well as the second quarter," he said. "In the Chicken segment, we anticipate an additional $100 million of increased grain costs over the second quarter, offset in part by operational improvements, pricing and risk management activities."

For the first six months of fiscal 2008, net income for the company was $29 million compared with $125 million during the previous year. Sales for the first half of 2008 were $13,378 million compared with $13,059 million.

Mr. Bond said for the year corn and soybean meal increases are likely to approach $600 million. Including other inputs such as cooking oil, breading and other feed ingredients, the increase in costs for the fiscal year may approach $1 billion compared to fiscal 2007.

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