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Tyson Reports Reduced Quarterly Sales and Earnings

Big business is down as costs rise and consumers look toward meat alternatives, but Tyson is optimistic
 Tyson Reports Reduced Quarterly Sales and Earnings
 
 

Today global meat processor and marketer Tyson Foods Inc. released its quarterly report, revealing a past quarter with lackluster sales and earnings that are forcing the business to lower its outlook for the rest of the year.

According to reports, Tyson’s net profit in its third fiscal quarter this year is recorded at $76 million or 21 cents per share – compared to last year’s third fiscal quarter net profit of $196 million, or 51 cents a share, that’s quite a substantial decline. Pork Network claims that analysts were expecting Tyson to see $34.02 billion in sales for 2012, but Tyson is now readjusting its sights toward a more realistic goal of $33 billion: that’s still an awful lot, but even the loss of a fraction of revenue can have major consequences throughout a business when you’re talking in terms of billions.

 

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Tyson is blaming the decline on a few things. One major problem is the price of corn and grain used for livestock feed, as this year’s crippling drought has caused commodity costs to rise. Another problem for Tyson has been its role in the pink slime backlash of early 2012 as a mass producer of ground beef products. The whole episode turned a lot of consumers off of ground beef for a while – at the end of March, Tyson CEO Jim Lochner predicted bad news for beef producers that had once relied on the filler, and now Tyson has the profits to prove it.

Still, Tyson is optimistic about the future ahead:

 

Despite higher grain costs, Tyson expects its chicken business to be profitable next year...Tyson said its beef segment should remain profitable, but margins could be below the typical range. Margins in the pork segment should be at or above the normal range, while prepared foods' margins should be in the normal range, it said.

 

According to Pork Network, analysts are slightly skeptical – “we think Tyson's optimism here should be interpreted as the most important part of the release, and a positive for the stock,” said one – but hey, there’s still one more quarter of a fiscal year to go and anything is possible.

 

[SOURCE: Pork Network]



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