The New York Times-20080129-Earnings Slide 40- at Tyson Foods

Return to: The_New_York_Times-20080129

Earnings Slide 40% at Tyson Foods

Full Text (244  words)

Tyson Foods, the meat producer, reported Monday that its first-quarter profit slid 40 percent and said that it would increase prices to offset the higher cost of commodities used to feed cattle, chickens and pigs.

The company also withdrew its earnings guidance for the year.

Tyson said it expected more than $500 million in additional grain costs this year, well above the $300 million increase it forecast in November.

Because of these unanticipated and extraordinarily high corn and soybean meal costs, we have no choice but to raise prices substantially, the chief executive, Richard L. Bond, said. For the foreseeable future, consumers will pay more and more for food, especially protein.

Mr. Bond said the company was considering shorter time frames for fixed prices for sales to restaurants and retailers.

Tyson shares rose 73 cents, to $13.99.

The company, based in Springdale, Ark., said it earned $34 million, or 10 cents a share, in the period ended Dec. 29, down from $57 million, or 16 cents a share, in the year-ago quarter. The quarter included an $18 million one-time gain and a $6 million charge. Analysts polled by Thomson Financial had forecast earnings of 4 cents a share. Those estimates typically exclude one-time items.

Tyson had sales of $6.8 billion for the quarter, up from $6.6 billion a year ago.

Mr. Bond said the company was well positioned as some consumers turn away from beef because they will choose Tyson's chicken and pork lines.