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Tyson Foods Posts Loss Amid Meat Oversupply
posted by admin on 01/08/06
The beef, pork & chicken producer generated a loss of $52 million vs $131 million profit in the year-earlier period
Tyson Foods Inc. reported a deeper-than-expected fiscal third-quarter loss, prompting the biggest U.S. meat company to lower its full-year earnings outlook and announce further cuts in production of chicken.
During the quarter ended July 1, the Springdale, Ark., processor of chicken, beef and pork generated a loss of $52 million, or 15 cents a share, compared with net income of $131 million, or 36 cents a share, in the year-earlier period. The company's results were hurt by charges of eight cents a share related to a legal settlement and plant closings. Third-quarter sales dropped 4.8% to $6.38 billion, compared with $6.71 billion a year earlier.
Analysts expected a loss of three cents a share on revenue of $6.63 billion, according to a Thomson First Call poll.
Tyson, which has embarked on a $200 million cost-savings plan, is being battered on several sides, including a price-depressing glut of chickens at a time when the costs of everything from energy to chicken rations are climbing.
To cope with these pressures, Tyson executives said during a conference call with analysts, the company is taking steps to cut its production of chicken by 5% this year. Tyson is also raising the prices it charges its foodservice customers.
Tyson said its expects to generate a fiscal-year loss in the range of 41 cents to 51 cents a share. Earlier, the company's fiscal year forecast ranged between a loss of 25 cents a share and earnings of a dime a share.
Tyson also said it is reviewing its tax-account balances after noticing differences in deferred tax liabilities during renewal of some leases. The company said the effect is an understatement of about $22 million. The company said the findings aren't likely to make a material difference on financial results. The review is expected to be complete by the end of October.
Tyson shares traded at $14.05, down 52 cents, or 3.6%, in morning trade Monday on the New York Stock Exchange.
--The Associated Press contributed to this article.
Write to Scott Kilman at email@example.com
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