SPRINGDALE, ARK. – The financial performance of Tyson Foods, Inc. during the third quarter of fiscal 2008, ended June 28, was hindered by the company’s Chicken business. High feed costs led to a loss in the Chicken segment and weighed down the company’s financial results. Third-quarter net income of $9 million, or 3c per common share, compared to $111 million, or 32c per common share, this past year.
Sales for the quarter were $6,849,000,000 compared to $6,618,000,000 during the previous year.
"In the third quarter of fiscal 2008, Tyson Foods’ diversified business offset the losses incurred by our Chicken segment, which is experiencing more difficult market dynamics," said Richard L. Bond, president and chief executive officer. "Our Beef, Pork and Prepared Foods segments were profitable, while our Chicken segment suffered a loss."
With sales of $2,251,000,000 during the third quarter, the company’s Chicken business suffered a $44 million loss.
"The Chicken segment remains under pressure from higher input costs, although we have been able to offset some losses through pricing and risk management activities," said Mr. Bond. "Grain costs were up an additional $140 million compared to the third quarter of 2007 and are expected to increase approximately $550 million for fiscal 2008."
Tyson Foods’ Beef business recorded operating income of $3 million during the quarter on sales of $2,980,000,000. The results compare unfavorably to the same period during the previous year, when the Beef unit had an operating income of $36 million on sales of $3,022,000,000, but Mr. Bond said the results are more positive than they appear.
"Beef performed better than expected, although results were masked by a negative $75 million impact from application of mark-to-market accounting treatment related to our unrealized derivative losses for forward cattle purchases and forward boxed beef sales," said Mr. Bond. "Although we will profit from this risk management activity over the coming months, it disguises an otherwise solid performance in our beef operations this quarter."
Operating income for Tyson’s Pork business was $54 million compared to $37 million during the third quarter of fiscal 2007. Sales for the segment during the quarter were $926 million compared with $857 million during the previous year. In the Prepared Foods segment operating income was $6 million on sales of $683 million compared to $26 million with sales of $666 million during the previous year.
For the first nine months of fiscal 2008, Tyson Foods had net income of $38 million, or 11c per common share, compared with $236 million, 69c per share during the first nine months of fiscal 2007. Sales for the period were $19,661,000,000 in 2008 compared with sales of $19,155,000,000 during fiscal 2007.