Tyson Foods Inc. (TSN) swung to a fiscal fourth-quarter loss on
a $560 million goodwill write-down at its beef business. Excluding
the write-down, the results beat analysts' expectations.
In the past year, Tyson has focused on what it calls a "back to
basics" business approach that includes cutting costs and improving
efficiencies. The meatpacker has recently benefited from rising
chicken prices and volumes as well as falling grain costs and lower
inventories after struggling heavily with plunging demand during
the heart of the recession.
Tyson last week tapped company veteran Donnie Smith as its new
chief executive. Smith said his priority early on will be to
continue putting the company's chicken business, which he led until
his appointment as chief, "back on track."
On Monday, Smith said all of Tyson's segments were profitable
and that excluding the write-down, its beef, pork and prepared food
businesses all were within or above historical operating-margin
ranges. Measures are in place for "more improvement at its chicken
business, he said. "The team knows what to do, and now it's a
matter of execution."
New Chief Operating Officer Jim Lochner added the coming year
should be "much better."
Tyson reported a loss of $455 million, or $1.22 a share,
compared with a prior-year profit of $48 million, or 13 cents, a
year earlier. Excluding the write-down and other impacts, earnings
were 28 cents.
Revenue rose $13 million to $7.21 billion as the latest quarter
had an extra week.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 26 cents on $6.8 billion in sales.
Gross margin rose to 6.4% from 4.9% amid reduced costs.
Chicken sales volume rose 10% as average prices edged up 0.6%
and the segment swung to a profit. Volumes of beef, Tyson's largest
segment, rose 14% as average prices dropped 16% and the segment
moved to a loss on the write-down.
Shares closed at $13.07 Friday and didn't move premarket. They
are up 49% so far this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;