Chicken segment strong as Tyson posts 1Q profit

Monday, January 29th 2007, 1:36 pm

By: News On 6

SPRINGDALE, Ark. (AP) _ Tyson Foods Inc., the world's largest meat producer, said Monday its profit climbed 46 percent from a year ago, as higher chicken sales and lower costs led to its first profitable quarter in a year.

The results beat Wall Street expectations, and its shares soared 7 percent in morning trading.

The company earned $57 million, or 16 cents per share, in the three months ended Dec. 30, up from $39 million, or 11 cents per share, a year prior.

Revenue was up 2 percent to $6.56 billion from $6.45 billion a year earlier.

The results beat analysts' expectations for a profit of 6 cents on revenue of $6.38 billion, according to a Thomson Financial poll.

Tyson lost $196 million in fiscal 2006 versus net income of $372 million in fiscal 2005.

The company affirmed its annual per-share guidance of 50 cents to 80 cents. But Chief Executive Dick Bond cautioned that increased demand for corn and other crops increasingly used to make fuel is driving up the price for those commodities.

``Companies will be forced to pass along rising costs to their customers, meaning consumers will pay significantly more for food,'' Bond said.

He said the ``dramatic rise'' in the price of corn has Tyson Foods and others in the industry concerned.

``As the food versus fuel debate unfolds, we must carefully consider the negative and unintended consequences of over-using grains,'' Bond said.

Tyson attributed its first-quarter profit to its chicken operations. The company said its pork and prepared foods segments had margins in ``normalized ranges.'' Beef was not profitable but showed improvement, Tyson said.

Selling, general and administrative expenses decreased $44 million, due to the company's cost-cutting efforts. Tyson is working cut $200 million from its expenses.

Bond said he expects Tyson to turn a profit in its second quarter.

Its shares rose $1.18 to $17.87 in morning trading on the New York Stock Exchange after briefly rising to a 52-week high of $17.94 earlier in the session.