Tyson income down 68% in year

by FoodBusinessNews.net Staff
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SPRINGDALE, ARK. — For the year ended Sept. 27, Tyson Foods, Inc. had net income of $86 million, equal to 25c per share on the common stock, down 68% from $268 million, or 79c per share, during the pervious year.

Sales for the year were $26,862 million, down 4% from $25,729 million during the previous year.

"Although it was a difficult year in many respects, we continued to manage the company for the long term and took important steps in our strategy to become a truly multi-national enterprise," said Richard Bond, president and chief executive officer. "In fiscal 2008 and early fiscal 2009, we acquired three poultry operations in Brazil, entered into majority ownership joint ventures in India and China and are awaiting government approval of our third joint venture in China. The convertible debt and equity issued in September allowed us to make these acquisitions while maintaining a strong balance sheet."

The chicken segment had an operating loss of $118 million during the year as the result of increased grain, plant and feed ingredient costs. Sales in the segment were $8.9 billion.

The beef segment had an operating income of $106 million during the year with results positively impacted by higher average sales prices and net gains from commodity risk management activities. Sales in the segment were $11.7 billion for the year.

The pork segment had an operating income of $280 million and was impacted by higher average sales prices and lower average live prices. Sales for the segment were $3.6 billion.

"Producing in the three major proteins has proven to be a strategic advantage," Mr. Bond said. "The strong performance by our beef and pork segments supported the chicken segment as it struggled throughout the year due to low prices and high input costs. Chicken lost $91 million in the fourth quarter due to approximately $230 million in additional grain costs over the fourth quarter of 2007 and pricing that couldn’t keep pace with inputs. Our prepared foods segment also delivered a disappointing quarter due to the high and volatile cost of raw materials."

For the fourth quarter ended Sept. 27, the company posted net income of $48 million, equal to 14c per share, up 50% from $32 million, or 10c per share, during the same quarter of the previous year. Sales for the quarter were $7,201 million, up 10% from $6,574 million during the same quarter of the previous year.

"Currently we are six weeks into the new fiscal year, and we are facing multiple challenges," Mr. Bond said. "Tight global credit is affecting exports in the short term, however we believe the underlying demand for our protein products is still strong. While input cost volatility and pricing pressure continues in chicken, our team is making very good progress improving our chicken business just as we improved beef and pork."

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