Tyson cites excess supply, high grain costs in flat earnings
Monday, April 28th 2003, 12:00 am
By: News On 6
SPRINGDALE, Ark. (AP) _ Tyson Foods Inc., the world's largest meat company, reported Monday that its profit for the first three months of the year rose nearly 11, compared with a year ago, to $72 million.
The company's fiscal second quarter profit was equal to 20 cents per share, which compared with a profit of $65 million, or 18 cents per share, a year earlier.
Without a $94 million gain related to a settlement of litigation over alleged price-fixing for vitamins in animal feed, Tyson would have reported a profit of just 3 cents per share, the company said.
Revenue for the period totaled $5.8 billion, matching its performance from a year ago.
Last month, the Springdale-based company downgraded its projected earnings for the quarter, saying it expected to break even. Analysts surveyed by Thomson First Call revised their earnings forecast to reflect no profit for the quarter.
Before the warning, Tyson had forecast a profit ranging from 10 cents to 14 cents a share for the quarter ending March 29. The company blamed a slow economy and a glut in the protein market for its flat earnings, plus higher prices for grain and live cattle.
Company chairman and chief executive John Tyson said he expects earnings to improve in the second half of the fiscal year.
``An improving economy and a better balance in the supply and demand for meat proteins leads us to believe we will have better results in the second half of our fiscal year,'' Tyson said.
The company is still integrating assets it picked up with the acquisition in 2001 of IBP Inc., a purchase that made Tyson the leader in meat production.
``In this difficult operating environment we remain on track to attain our synergy targets from the acquisition. We are continuing to improve our mix of value added and branded products, and we are seeing positive results from our branding strategy announced last quarter,'' Tyson said.
For the first six months of fiscal 2003, the company said it earned 31 cents per share, compared to 54 cents in the six months one year prior.
For the six-month period, Tyson had sales of $11.6 billion compared to $11.7 billion a year before. Earnings for the six months were $111 million compared to $192 million for the first six months of fiscal 2002.