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Higher grain, fuel costs send Tyson Foods to $5m lossLITTLE ROCK, Arkansas (AP)--Tyson Foods Inc., the world's largest meat producer, said April 28 it lost $5 million in its second-quarter as it faces high feed and fuel costs and absorbed charges for plant closings. Tyson lost 2 cents a share in the three months ended March 29 versus a profit of $68 million or 19 cents per share in same period a year ago. The loss includes $47 million in charges for plant closings and asset impairments, or 8 cents per share. Tyson's sales were $6.61 billion compared with $6.50 billion in its second quarter a year ago. Analysts polled by Thomson Financial had projected Tyson would earn a penny per share on revenues of $6.69 billion. Tyson Foods President and CEO Richard L. Bond said that, despite the increased costs, the company had a strong quarter. "Our second quarter results show the strength of a diversified protein business model," Bond said. "We continue to believe the second fiscal quarter should be our most challenging, and we are pleased with our results. "Our chicken and pork exports continue to be strong, and we are moving forward with our strategy for international expansion," Bond said. The reopening of South Korea to U.S. beef will help starting in the third quarter, 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," Bond said. Beef, which accounts for 45 percent of Tyson Foods' sales, lost $11 million in the quarter, in part because of higher operating costs at a unit in Canada and a $17 million charge for restructuring the company's Emporia, Kansas, plant. The segment also sustained an $8 million charge for an impairment of packaging equipment. "Our beef segment improved $74 million over the first quarter of this fiscal year, or approximately $100 million excluding plant closing and asset impairment charges," Bond said. Chicken accounts for 33 percent of the company's sales, $2.2 billion for the second quarter. The segment lost $61 million for the quarter, though sales increased in price and volume from a year before. Increased grain costs of $102 million hurt earnings for the quarter, as did a $13 million charge for closing a plant in Wilkesboro, North Carolina. Pork accounted for 12 percent of Tyson sales for the quarter at $822 million, and the segment earned $20 million. The company said greater exports and lower average live prices helped the bottom line, though higher operating costs and lower sales prices partially offset gains. Bond said the segment had its best second quarter since being acquired in 2001. Tyson's prepared foods segment earned $20 million and accounted for 10 percent of sales at $632 million for the period. 7/7/08 Date: 6/27/08
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