Meat products producer Tyson Foods Inc. (TSN) Friday reported a profit for the first quarter of fiscal 2010, as operating income improved in all of its segments, with chicken and beef reporting exceptionally well. On a per share basis, profit exceeded Wall Street expectation by a wide margin.
The company's net income attributable to Tyson was $160 million or $0.42 per share, compared to a net loss of $102 million or $0.27 per share last year.
Income from continuing operations was $159 million or $0.42 per share, compared to a loss from continuing operations of $110 million or $0.29 per share in the prior year. On average, 13 analysts polled by Thomson Reuters expected the company to earn $0.18 per share. Analysts' estimates typically exclude special items.
In the fourth quarter, the company reported a net loss of $455 million or $1.22 per share.
Gross profit increased to $529 million from $18 million in the previous year. Gross margin improved to 8.0% from 0.3%.
Sales for the quarter increased to $6.635 billion from $6.521 billion in the same quarter last year. Analysts were looking for revenues of $6.58 billion for the quarter. In the fourth quarter, sales amounted to $7.21 billion.
Operating income for the quarter was $314 million, compared to operating loss of $198 million in the previous year.
Chicken sales grew to $2.425 billion from $2.234 billion, primarily due to a recent international acquisition. The segment reported operating income of $78 million, compared to an operating loss of $286 million last year. Tyson said average sales price rose 2.8% and volume rose 5.6%, and operating results were benefited by a decrease in grain costs of $84 million.
Beef sales advanced to $2.682 billion from last year's $2.663 billion. The company reported an operating income of $119 million in this segment. Average sales price declined 6.1%, but volume rose 7.2% and operating margins grew to 4.4% from 0.0% as the company maximized its revenues relative to live cattle markets and improved operating costs.
Pork sales slipped in the quarter to $815 million from $878 million and operating income grew to $62 million from $55 million. Average sales price declined 6.1%, but operating margin rose to 7.6% from 6.3%, as the average live costs decreased in line with the drop in average sales prices.
Sales of Prepared Foods dropped to $713 million from $746 million in the previous year, but operating income rose to $55 million from $35 million last year. Average sales price dropped 5.8%, but operating income improved due to an increase in sales volume, as well as a reduction in raw material costs. The company also received $8 million in insurance proceeds related to the flood damage at its Jefferson,Wisconsin, plant.
Cost of sales dropped to $6.106 billion from $6.503 billion in the previous year. Total debt, net of cash and restricted cash, was $1.9 billion, down $400 million from the end of fiscal 2009.
Commenting on the results, Donnie Smith, Tyson's president and chief executive officer, said, "Beef, Pork and Prepared Foods continued to execute well, and Chicken began to show the improvement we've been working toward for more than a year. Our team members did a great job of staying focused and making progress week after week. We're developing momentum that I believe will continue through the year and into 2011."
Looking ahead to 2010, in chicken, the company expects seasonal demand and pricing environment will improve, while grain costs are expected to be down from fiscal 2009.
In Beef and pork, the company expects to have adequate supplies to operate its plants. In Prepared Foods, the company expects raw material costs to increase in fiscal 2010 and sees a negative impact from this in the second quarter until some price increases take effect.
Last month, Credit Suisse upgraded Tyson's stock to "Outperform" from "Neutral" and increased its price target to $16 from $13. The brokerage raised its fiscal 2010 earnings estimate to $1.05, and its fiscal 2011 estimate to $1.20. The brokerage sees upside to Tyson's profit margins in chicken with commodity chicken prices starting the year up 17% compared to 2009. Wall Street looks for 2010 earnings of $1.01 per share.
Chicken producer Pilgrim's Pride Corp. (PPC) Thursday posted a profit for the first quarter as against a loss in the prior-year quarter, helped primarily by an income tax benefit. First-quarter net income attributable to the company was $33.61 million or $0.44 per share compared to a loss of $228.78 million or $3.09 per share in the comparable period last year. Net sales for the quarter declined to $1.60 billion from $1.88 billion in the prior-year period.
TSN is currently trading at $14.94, up $0.95 or 6.86%, on 4.53 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.